Iconic CA Burger Chain Faces Major Restructuring Amid Bankruptcy Filing Friendly Franchisees Corporation, one of California’s largest Carl’s Jr. franchise operators, has filed for Chapter 11 bankruptcy protection, signaling a potential wave of closures, sales, and new ownership across the state. The company, which manages 59 Carl’s Jr. locations and employs approximately 1,000 workers, is seeking to reject leases at 10 underperforming restaurants while attempting to sell the remaining properties. The decision comes amid mounting financial pressures tied to California’s $20 minimum wage for fast-food workers, which took effect in April 2024. Court filings reveal that the franchisee, led by founder Harshad Dharod, is targeting the closure of 10 locations, some of which have operated for decades. While the exact number of sites that will remain open is unclear, the bankruptcy filing highlights the broader challenges facing the fast-food chain in the state. A spokesperson for Carl’s Jr. confirmed awareness of Dharod’s plans but emphasized that the situation is specific to his franchise and does not affect other locations. The bankruptcy proceedings underscore the financial strain on the company, which reported collective monthly revenues exceeding $6 million but has been losing over $600,000 per month this year. One Arcadia location alone is estimated to have incurred losses of more than $400,000 over two years. The franchisee cited rising operating costs, increased competition, and declining sales as key factors contributing to the losses. The crisis reflects a larger trend for Carl’s Jr. in California, where the chain has already seen a reduction in store count. In 2025, the brand operated 588 locations, down from 613 in 2023. Consumer spending at Carl’s Jr.#california #arcadia #harshad_dharod #carls_jr #national_franchise_sales
Major Carl’s Jr. Franchisee Plans to Close and Sell Dozens of California Locations A major Carl’s Jr. franchisee, Harshad Dharod’s Friendly Franchisees Corporation, is reportedly planning to close 10 restaurants and sell 49 others across California after filing for bankruptcy protection earlier this year. The company, which operates under the Anaheim-born fast-food chain, has faced mounting financial pressures, including rising operating costs and California’s $20-per-hour fast-food minimum wage. These factors, combined with other operational challenges, have led to the decision to restructure its business. According to the Los Angeles Times, Dharod’s company, which claims to be the largest California-based Carl’s Jr. franchisee, has acquired at least 65 locations since 2000. However, the business has struggled with significant losses. Bankruptcy filings indicate that Dharod’s restaurants generated over $6 million in monthly revenue in 2026 while losing more than $600,000 per month. The financial strain has been exacerbated by understaffing, workplace injuries, and violent encounters with customers, as reported by employees. Dharod has also criticized Carl’s Jr. for a lack of support and innovation, which he claims has contributed to the restaurants’ financial difficulties. The franchisee’s restructuring plan involves closing 10 locations and selling 49 others, marking a major shift in its operations. The company’s bankruptcy filing under Chapter 11 protection in April highlights the severity of its financial situation. A spokesperson for Carl’s Jr. previously told Restaurant Business that the restructuring is specific to Dharod’s operations and will not affect other Carl’s Jr. locations. The company stated, “We are aware that Carl’s Jr.#california #harshad_dharod #friendly_franchisees_corporation #carl_s_jr #chapter_11_bankruptcy
