Meritage Hospitality

MERITAGE ASSIGNED NEW TRADING SYMBOL

GRAND RAPIDS, Michigan, February 14, 2007. Meritage Hospitality Group Inc. (Pink Sheets: MHGU), one of the nation’s premier hospitality companies and only publicly traded Wendy’s and O’Charley’s restaurant franchisee, has been assigned a new trading symbol, MHGU, effective February 14, 2007. Meritage, which has quoted on the Pink Sheets after voluntarily delisting from the American Stock Exchange effective January 23, 2007, was previously quoted under the symbol MHGP. The Company has approximately 5,400,000 common shares issued and outstanding with an estimated public float of 3,000,000 common shares (i.e., shares held by those other than officers, directors or 10% shareholders). In addition, the Company had made application to the OTCQX – a new premium listing service offered by Pink Sheets that is intended to provide a premier trading, quotation and disclosure market for Meritage’s securities. This new premium tier listing will commence trading on March 5, 2007.

Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees. In addition, the Company has announced plans to engage in the development of waterfront hospitality development opportunities on the island of Eleuthera, Bahamas. The development is subject to permits, the economic feasibility of the project and various conditions.

MERITAGE NOW TRADING ON PINK SHEETS;
APPLICATION TO OTCQX PENDING

GRAND RAPIDS, Michigan, February 12, 2007. Meritage Hospitality Group Inc. (MHGP.PK), one of the nation’s premier hospitality companies and only publicly traded Wendy’s & O’Charley’s restaurant franchisee, is issuing this press release to clarify that a 1-for-300 reverse stock split of the Company’s issued and outstanding common shares, followed immediately by a 300-for-1 forward stock split of its common shares, was completed on January 23, 2007. As a result of this transaction, the Company’s record common shareholders fell below 300, and the Company terminated its registration of common shares with the Securities and Exchange Commission and also terminated its listing of the Company’s common shares on the American Stock Exchange. The Company now has approximately 5,400,000 common shares issued and outstanding, with an estimated public float of 3,000,000 common shares (i.e., shares held by those other than officers, directors or 10% shareholders).

As a result of the stock splits, effective January 23, 2007, Meritage’s common shares are quoted on the Pink Sheets under the symbol MHGP.PK. In addition, the Company has made application to the OTCQX – a new premium listing service offered by Pink Sheets that is intended to provide a premier trading, quotation and disclosure market for Meritage’s common shareholders. This new premium tier listing will commence trading on March 5, 2007.

MERITAGE REPORTS SETTLEMENT OF O’CHARLEY’S LITIGATION

GRAND RAPIDS, Michigan, February 9, 2007. Meritage Hospitality Group Inc. (MHGP.PK), one of the nation’s premier hospitality companies and only publicly traded Wendy’s & O’Charley’s restaurant franchisee, today announced it settled the lawsuit filed last year against O’Charley’s Inc., the franchisor of the Company’s O’Charley’s of Michigan business segment. Under terms of the agreement, which are confidential, Meritage will continue operating its O’Charley’s restaurants in Michigan and will also continue to evaluate expansion of the brand at new locations that have solid demographic profiles and population growth.

Robert E. Schermer Jr., the Company’s CEO, stated, “We believe this settlement is a ‘win-win’ for Meritage, O’Charley’s Inc. and all stakeholders in the O’Charley’s restaurant system. One of Meritage’s main focuses is to strengthen the O’Charley’s brand presence in Michigan so that more people can discover O’Charley’s high-quality food and customer service at casual dining prices.”

O’Charley’s Inc. is a leading multi-concept restaurant company that operates or franchises a total of 362 restaurants under three brands: O’Charley’s, Ninety Nine Restaurants and Stoney River Legendary Steaks. The O’Charley’s concept includes 238 restaurants in 18 states in the Southeast and Midwest, including the five franchised restaurants in Michigan. O’Charley’s is best known for the freshness and homemade quality of its food, including several specialty items such as hand-cut and aged steaks, a variety of seafood and chicken, freshly baked yeast rolls, and fresh salads with special-recipe salad dressings.

MERITAGE TO MAKE APPLICATION FOR OTCQX LISTING: A NEW PREMIUM LISTING SERVICE OFFERED FOR OVER-THE-COUNTER SECURITIES ETS DATE FOR A SPECIAL MEETING OF SHAREHOLDERS

GRAND RAPIDS, Michigan, January 9, 2007. Meritage Hospitality Group Inc. (AMEX: MHG), today announced that it intends to make application to the OTCQX – a new premium listing service offered by Pink Sheets that is intended to provide a premier trading, quotation and disclosure venue for over-the-counter securities in the U.S. markets. This new premium tier listing will commence trading on March 5, 2007. The OTCQX provides issuers with an efficient and robust platform to list their securities and access secondary market equity. The OTCQX is specifically designed to meet the needs of smaller companies that were listed on a national exchange (such as the AMEX or Nasdaq) that are now looking for a reporting mechanism more customized to their needs.

Meritage is holding a special meeting of shareholders at 10:00 a.m. on January 23, 2007 wherein a going private transaction (by means of a 1-for-300 reverse stock split followed by a 300-for-1 forward stock split) will be voted on by Meritage shareholders. If approved, the Company will withdraw its listing of common shares on the American Stock Exchange (the AMEX) and terminate registration of its common shares with the U.S. Securities and Exchange Commission. Meritage is taking these steps to avoid the ever increasing public company costs (including Sarbanes-Oxley Act costs) that the Company believes disproportionately affect smaller publicly traded companies.

Under the new OTCQX premium platform, the Company would, among other things, continue to provide ongoing quarterly and annual financial statements, disclose interim material events, conduct annual audits, provide management certifications, and conduct annual shareholder meetings. James R. Saalfeld, Meritage’s Vice President and Chief Administrative Officer, stated, “The new premium OTCQX platform comes at a perfect time for Meritage as it would allow us to avoid the high costs of being a publicly traded company while still providing our shareholders with a premier trading, quotation and disclosure venue for our securities.”

MERITAGE PROCEEDING WITH DEREGISTERING TRANSACTION; SETS DATE FOR A SPECIAL MEETING OF SHAREHOLDERS

GRAND RAPIDS, Michigan, December 20, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), today announced plans to withdraw from listing its common shares on the American Stock Exchange (AMEX) and to terminate registration of its common shares with the U.S. Securities and Exchange Commission (SEC). The Company is taking these steps as part of a going-private transaction intended to avoid public company costs including Sarbanes-Oxley Act costs that the Company believes disproportionately affect smaller publicly traded companies. In light of this delisting and deregistration process, the Company will no longer file current and periodic reports with the SEC, although the Company will continue to communicate with its investors as a private company. The Company intends to maintain a market in its common shares by having the shares listed on a quotation service that does not require an issuer to be registered with the SEC such as the Pink Sheets, but currently has no arrangement for listing in place.

If approved by shareholders at a special meeting of shareholders set for 10:00 a.m. on January 23, 2007, the going private transaction would be effected through a 1-for-300 reverse stock split followed by a 300-for-1 forward stock split. Shareholders owning less than one share after the reverse stock split would receive a cash payment of $5.25 per share as calculated on a pre-reverse stock split basis. Meritage filed notice with the AMEX today commencing the process of voluntarily withdrawing its common shares from listing. The Company expects that the delisting of its common shares on the AMEX will be effective on or about the date of the Company’s special meeting of shareholders, even if the stock split transactions are not approved by Meritage’s shareholders at the special meeting.

This press release is only a brief description of a proposed transaction and is not a solicitation of a proxy or an offer to acquire any shares of common stock. Meritage has filed a Proxy Statement and Schedule 13E-3 with the SEC outlining the transaction. Shareholders are advised to read the definitive Proxy Statement and Schedule 13E-3 carefully because these documents contain important information about the special meeting and the proposed transaction, including information about the mechanics of the proposed transaction, persons soliciting proxies, and their interests in the transaction. Shareholders may obtain a free copy of the Proxy Statement and Schedule 13E-3 at the SEC's web site at http://www.sec.gov or in the Investor Information section of Meritage’s website at http://www.meritagehospitality.com. Meritage is also mailing a copy of the definitive Proxy Statement to its shareholders entitled to vote at the special meeting. The Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the shareholders in favor of the proposed transaction. Investors and security holders may obtain more detailed information regarding the direct and indirect interests of the Company and its executive officers and directors in the proposed transaction by reading the Proxy Statement.

MERITAGE ANNOUNCES PLANS FOR HOSPITALITY DEVELOPMENT ON ELEUTHERA ISLAND , BAHAMAS

GRAND RAPIDS, Michigan, August 17, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), one of the nation’s premier franchise operators, today announced plans to engage in the development and sale of a condominium hotel on waterfront property on the island of Eleuthera in the Bahamas. Meritage has tentatively agreed to acquire several acres of waterfront property on the island of Eleuthera, and has entered into a letter of intent with Tecton Hospitality, a hotel management company based in Miami, Florida, to operate a planned 78-unit national brand extended stay condominium hotel. Meritage anticipates that it will pre-sell condominium hotel investment units through Marcus & Millichap, a real estate investment brokerage company headquartered in New York City.

Robert E. Schermer, Jr., Meritage’s Chief Executive Officer, stated, “We are excited about our development opportunities on Eleuthera - one of the most pristine and unique islands in the Bahamas. I see this as a natural extension of our previous hotel and marina dockominium development experience, combined with our real estate development and sales experience in our current business.” Meritage expects to utilize its existing relationships with its contractors and development teams which have assisted the Company build over thirty-five retail properties during the past seven years and which have experience in similar developments. Condominium and investment real estate would be pre-sold through Marcus & Millichap in the United States and through local Bahamian brokers. The Company is also evaluating development, sales and marketing participation in a large upscale leisure and lifestyle oriented planned residential resort opportunity on Eleuthera, which plans include two ultra-luxury condominium hotels, a marina, golf course and oceanfront estate lots. Mr. Schermer added, “From my perspective, the ‘rational rich’ baby boomers are looking for upscale, unique experiences two flights from home. Eleuthera today is like Hawaii was 35 years ago - with world class scuba diving, sport fishing, and beaches all in a pristine ecological environment which is vigorously protected.”

MERITAGE REPORTS SECOND QUARTER RESULTS,
31st CONSECUTIVE QUARTER OF SALES GROWTH

GRAND RAPIDS, Michigan, June 30, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today announced net sales for the second fiscal quarter ended May 28, 2006 increased 8.1% to $15.2 million, compared to $14.0 million during the same period last year. Meritage reported a net loss for the quarter of $0.7 million or $0.15 per share, compared to a net loss of $1.0 million or $0.21 per share for the same period last year.

Sales for the six month period ended May 28, 2006 increased 6.3% to $28.7 million compared to $27.0 million during the same period last year. Meritage reported a net loss for the six month period of $2.0 million or $0.42 per share, compared to a net loss of $2.8 million or $0.59 per share for the same period last year.

Trends have improved at the Wendy’s level as same store sales increased slightly in the second fiscal quarter, the first quarterly year-over-year increase since the third quarter of 2004. New menu items such as the Frescata Sandwich and three new salad offerings, along with the Company’s initiatives focused on improved local store marketing and advertising, are having a positive impact. Other new products are in the pipeline including a breakfast menu which Wendy’s International is planning to introduce in 2007.

While the Company continues to face challenges such as increased fuel and energy costs, underperforming national brands and a sluggish state economy, Meritage is encouraged by Wendy’s new initiatives and renewed focus on franchisees’ profit margins which we believe has been aided by the formation of the Wendy’s Old Fashioned Franchise Association, an independent franchise group representing the interests of Wendy’s franchisees. The Company is hopeful that O’Charley’s Inc. will undertake similar measures to support and enhance its brand recognition and unit level sales in new markets.

GRAND RAPIDS, Michigan, June 16, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, announced that it has engaged Donnelly Penman & Partners to act as the exclusive financial advisor to the Board of Directors in connection with a possible deregistering transaction. In April, the Company reported that it was resuming its investigation of a deregistering transaction which would allow it to avoid public company costs by no longer having to file reports under the Securities Exchange Act of 1934 or be listed on the American Stock Exchange. The Company is considering a reverse stock split that would reduce the number of record shareholders to a level that allows it to deregister from the SEC. Following such a transaction, the Company will use its best efforts to provide liquidity to the Company’s remaining shareholders. For example, the Company intends to maintain a market in its common shares by having the shares listed on a quotation service that does not require an issuer to be registered with the SEC such as the Pink Sheets, and will consider other transactions, such as an issuer tender offer, that may provide its shareholders with an opportunity to monetize a portion of their investment in Meritage. There can be no assurance that the Board’s investigation will result in any of these transactions.

MERITAGE ANNOUNCES STRONGER SALES WITH FRESCATA SANDWICH INTRODUCTION

GRAND RAPIDS, Michigan, May 2, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today reported that the Company is experiencing stronger sales with the introduction of Wendy’s new Frescata line of premium deli sandwiches. “The Frescata deli sandwiches have been well received by our customers who appreciate the exceptional quality and taste of the product,” stated Robert E. Schermer, Jr., Chief Executive Officer. “The Frescata menu line includes four premium deli sandwiches with high quality meats and distinctive sauces served on artisan bread. This product line opens up a whole new menu category for us and gives our customers another reason to visit Wendy’s. We are encouraged by other new products such as the new Garden Sensations salads, and the new promotions and products planned for later this year including two new nutritious Kids’ Meal sandwiches,” added Mr. Schermer.

MERITAGE TO RESUME EXPLORATION OF DEREGISTERING TRANSACTION

GRAND RAPIDS, Michigan, April 18, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today announced that its Board of Directors is resuming its review of a possible going-private transaction which would result in the Company no longer filing reports under the Securities Exchange Act of 1934 or being listed on the American Stock Exchange. This move would allow Meritage to avoid public company costs including Sarbanes-Oxley Act costs that the Company believes disproportionately affect smaller publicly traded companies. There can be no assurance that the Board’s review will result in a going-private transaction.

Meritage’s Chief Executive Officer, Robert E. Schermer, Jr. stated, “If Meritage proceeds with a going-private transaction, it would be our intention to maintain a market in the Company’s common shares by having the shares listed on a quotation service that does not require issuers to be registered with the SEC such as the Pink Sheets.”

MERITAGE REPORTS FIRST QUARTER 2006 RESULTS;

30th CONSECUTIVE QUARTER OF SALES GROWTH

GRAND RAPIDS, Michigan, March 29, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and the first O’Charley’s franchisee, today announced net sales for the first fiscal quarter ended February 26, 2006 increased 4.4% to $13.6 million, compared to $13.0 million during the same period last year. Meritage’s net loss for the quarter was $1,274,000 or $0.27 per share, compared to a net loss of $1,804,000 or $0.38 per share for the same period last year.

Meritage’s Chief Executive Officer, Robert E. Schermer, Jr. stated, “We are encouraged by Wendy’s International’s new menu offerings and advertising campaigns that should strengthen fiscal 2006 sales. Wendy’s International recently announced its ‘3 Tier – 3 Year’ plan to invigorate the brand and improve results by increasing transactions, reducing costs and focusing on store level margins. This comes after enduring system-wide margin compression for several years. A key step in this plan is the introduction of new menu items such as the Frescata deli sandwich which is now available at our Wendy’s restaurants. In addition, Wendy’s International is planning to offer breakfast next year, a move that our franchisor anticipates could increase average unit sales by $160,000 within three years (a potential $7.7 million annual increase in sales for Meritage). On the O’Charley’s side, the store opening results of our newest restaurant located in Belleville, Michigan, have been the best among our five units.”

Mr. Schermer added, “Wendy’s International plans to invigorate the brand should strengthen fiscal 2006 sales. We are hopeful that O’Charley’s Inc. will also undertake similar measures to enhance its brand reputation and increase sales. In the meantime, we reduced overhead costs by eliminating and realigning management and administrative positions throughout the organization, and by making new investments in technology. These efforts are expected to result in annual savings of approximately $600,000 on a consolidated basis.”

Meritage is one of the nation’s premier franchise operators, currently operating 53 restaurants in two “Best of Class” brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.

February 17, 2006

Dear Fellow Shareholder:

Enclosed is a $0.06 per common share cash dividend. This dividend represents a 20% increase over the cash dividend we paid out in January 2005. Dividends are an important element in our long-term strategy of building value for you - our fellow business owners. Accordingly, our Board of Directors will consider additional dividends in the future.

Meritage is one of the nation’s premier restaurant franchise operators. We operate 53 restaurants in two primary business segments through well-recognized “best of class” brands: Wendy’s in the Quick Service segment and O’Charley’s in the Casual Dining segment.

Last month, we opened our fifth O’Charley’s restaurant in Michigan. Store opening results were the best among our O’Charley’s restaurants to date. We hope to add to this momentum during the year as our franchisor, O’Charley’s Inc., assists us in rolling out the first advertising plan for the O’Charley’s restaurant brand in Michigan. In addition, O’Charley’s Inc. is re designing the restaurant building and layout with a desire to reduce costs and increase operating efficiencies. We anticipate the new prototype will be available for Meritage in 2007.

In our Wendy’s business, our franchisor, Wendy’s International, is undertaking a plan to invigorate the brand and improve results by raising sales, reducing costs and focusing on margins. A key step in this new plan is the introduction of breakfast which will provide customers with distinctive breakfast options. Wendy’s International anticipates that adding breakfast could increase average unit sales by $160,000 within three years, which could result in a possible $7.7 million increase in sales for Meritage. In addition, Wendy’s will introduce new Frescata deli sandwiches this spring which will provide four different offerings on fresh-baked artisan bread. We are encouraged by the new products and promotions in both of our restaurant concepts which were promotionally “dormant” in 2005.

Meritage is also prepared to expand beyond its two franchise brands and its current geographical presence while continuing to achieve operational excellence. Various alternatives are being explored.

The Board of Directors remains committed to increasing shareholder value through growth and the return of capital to its shareholders. We thank you for your continued support as both a valued customer and shareholder of Meritage.

Robert E. Schermer, Jr.

Chief Executive Officer

This dividend will be paid out of Additional Paid in Capital and will reduce Additional Paid in Capital and Total Stockholders’ Equity by approximately $327,000.

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MERITAGE OPENS 53rdRESTAURANT;

FIFTH O’CHARLEY’S RESTAURANT IN MICHIGAN

GRAND RAPIDS, Michigan, January 25, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and O’Charley’s franchisee, today announced the grand opening of its fifth O’Charley’s restaurant located at 9729 Belleville Road in Van Buren Township, Michigan, in front of the Meijer supercenter.

Meritage’s Chief Executive Officer, Robert E. Schermer, Jr., stated, “This opening is an important milestone for the Company as it represents our fifth O’Charley’s restaurant in the State of Michigan, and Meritage’s 53rd restaurant in operation. Our development plans for 2006 include at least one additional O’Charley’s and one additional Wendy’s.”

For 2006, we are encouraged by a number of emerging business cycles and opportunities. In our Wendy’s business segment, we are entering the first wave of new products and marketing initiatives implemented by our franchisor, Wendy’s International, after enduring system-wide margin compression for several years. In addition, beef and commodity costs have currently eased. In our O’Charley’s business segment, we are working toward steady margin improvements after absorbing the heavy costs of developing our base of O’Charley’s restaurants in 2005. Our franchisor is in the process of building a new management team to lead the O’Charley’s brand, and we anticipate a new restaurant model that offers lower building costs and higher operating efficiencies. Separately, Meritage continues to make investments in technology, operating, financial and information systems that will help Meritage expand its franchise brands and geographical presence.

Mr. Schermer stated, “We remain committed to increasing shareholder value and returning capital to our shareholders while maintaining the capacity to grow our business both organically and through strategic acquisitions. I believe Meritage is prepared to expand its franchise brands and geographical presence while continuing to achieve operational excellence.”

Meritage is one of the nation’s premier restaurant franchise operators. Meritage currently operates 53 restaurants in two primary business segments through well-recognized “Best of Class” brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.

GRAND RAPIDS, Michigan, January 12, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), one of the nation’s premier franchise operators, today announced that it has declared a cash dividend of $0.06 per outstanding common share. The dividend is payable on February 24, 2006, to shareholders of record on January 27, 2006. The dividend marks a 20% increase over the cash dividend paid in January 2005.

Robert E. Schermer, Jr., Meritage’s CEO, commented, “In 2005, we continued to make progress on our strategic initiatives including our real estate strategy of sale and leaseback transactions that generated cash proceeds of $20.5 million, permitted the Company to pay down $11.5 million of long-term debt, and resulted in deferred long-term gains of $8.4 million. Our focus remains to increase our financial flexibility and our ability to expand our franchise brands and geographical presence while continuing to achieve operational excellence. The Company’s Board of Directors remains committed to increasing shareholder value and returning capital to our shareholders while maintaining the capacity to grow our business both organically and through strategic acquisitions, and will consider additional dividends in the future.”

For 2006, we are encouraged by a number of emerging business cycles and opportunities. In our Wendy’s (QSR) business segment, we are entering the first wave of new products and marketing initiatives implemented by our franchisor, Wendy’s International, after enduring system-wide margin compression for several years. In addition, beef and commodity costs appear to be easing. In our O’Charley’s (Casual Dining) business segment, we are working toward steady margin improvements after absorbing the heavy costs of developing our base of O’Charley’s restaurants in 2005. O’Charley’s, Inc., our franchisor, is in the process of building a new management team to lead the O’Charley’s brand, and we anticipate a new restaurant model that offers lower building costs and higher operating efficiencies. Separately, Meritage continues to make investments in technology, operating, financial and information systems that will help Meritage expand its restaurant base into a national restaurant platform.

Meritage is one of the nation’s premier restaurant franchise operators. Meritage currently operates 52 restaurants in two primary business segments through well-recognized “Best of Class” brands; Wendy’s in the QSR Segment and O’Charley’s in the Casual Dining Segment. Headquartered in Grand Rapids, Michigan, Meritage has approximately 2,000 employees.

GRAND RAPIDS, Michigan, January 12, 2006. Meritage Hospitality Group Inc. (AMEX: MHG), one of the nation’s premier franchise operators, today announced net sales for the fiscal year ended November 27, 2005 increased 5.1% to $56,037,000, compared to $53,303,000 last year. The Company’s net loss for the fiscal year was $4,858,000 or $0.98 per share, compared to a net loss of $489,000 or $0.15 per share last year. As expected, the Company experienced a loss which was due in part to the early prepayment of long-term indebtedness related to several sale-leaseback transactions and pre-opening expenses associated with new O’Charley’s restaurant openings.

Meritage’s net sales for the fourth quarter ended November 29, 2005 increased 4.4% to $14,275,000, compared to $13,669,000 over the comparable period last year. Net loss for the fourth quarter was $1,584,000 or $0.29 per share, compared to a net loss of $210,000 or $0.04 per share during the same period last year. This sales increase marks the 29th consecutive quarter of sales increases for Meritage.

Commenting on the fiscal results, CEO Robert E. Schermer, Jr. stated, “As previously indicated, 2005 was expected to be a challenging year for the Company. However, I believe that our reported results provide an incomplete picture of progress being made on several fronts relating to our strategic initiatives which we knew would skew our results in 2005. In 2006, we expect to return to more historical operating results.”

Mr. Schermer continued, “During 2005, we continued to maintain the highest operating standards in our 52 franchised Wendy’s and O’Charley’s restaurants. Meritage received “sparkle certification” for all 48 Wendy’s restaurants, meaning each store received the franchise system’s highest grades in food safety, food quality, cleanliness and service. Likewise, the O’Charley’s franchisor recognized Meritage’s restaurants for outstanding levels of service. Our real estate strategy of sale and leaseback transactions in fiscal 2005 generated cash proceeds of $20.5 million, permitted the Company to pay down $11.5 million of long-term debt, and resulted in deferred long-term gains of $8.4 million. We also undertook important steps to expand our operating platform in 2006 and beyond as we explore leading franchise brand restaurant opportunities that tend to dominate a niche market, provide superior unit-level economics, and deliver products and services of outstanding quality.”

For 2006, we are encouraged by a number of emerging business cycles and opportunities. In our Wendy’s (QSR) business segment, we are entering the first wave of new products and marketing initiatives implemented by our franchisor, Wendy’s International, after enduring system-wide margin compression for several years. In addition, beef and commodity costs have currently eased. In our O’Charley’s (Casual Dining) business segment, we are working toward steady margin improvements after absorbing the heavy costs of developing our base of O’Charley’s restaurants in 2005. Our franchisor is in the process of building a new management team to lead the O’Charley’s brand, and we anticipate a new restaurant model that offers lower building costs and higher operating efficiencies. Separately, Meritage continues to make investments in technology, operating, financial and information systems that will help Meritage expand its franchise brands and geographical presence.

GRAND RAPIDS, Michigan, November 2, 2005. Meritage Hospitality Group Inc. (AMEX: MHG), the nation’s only publicly traded Wendy’s franchisee and O’Charley’s franchisee, today announced plans to expand its restaurant base into a national restaurant franchise platform. The objective is to increase shareholder value and liquidity by leveraging and expanding our brands and geographical presence through both organic growth and strategic acquisitions. To accomplish this plan, Meritage plans to explore the following:

Robert E. Schermer, Jr., Meritage’s CEO, stated, “Over the past several years, we have developed a highly capable management team that will enable Meritage to expand into a national franchise platform. Our executive management team and board of directors share a passion for operational excellence which is demonstrated by Meritage’s solid track record of building out markets and operating

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MERITAGE OPENS 53rd RESTAURANT;

FIFTH O’CHARLEY’S RESTAURANT IN MICHIGAN

Wendy's International, Inc. Announces New Combo Plan to Drive Sales,
Improve Margins and Reduce Costs

MERITAGE OPENS 53rdRESTAURANT;