A MAJOR CARL’S JR. FRANCHISEE FILED FOR BANKRUPTCY & PLANS TO CLOSE RESTAURANTS

Carl’s Jr. fans in California may soon see fewer smiling stars along the state’s highways.

One of the chain’s largest franchisees is planning to close 10 Carl’s Jr. restaurants and sell 49 additional locations after filing for Chapter 11 bankruptcy protection earlier this year. The affected restaurants are primarily located throughout California, with many concentrated in Southern California.

According to the Los Angeles Times, franchisee Harshad Dharod, who controls 59 Carl’s Jr. locations, intends to close 10 restaurants while seeking buyers for the remaining locations. A brokerage firm has already begun marketing the locations to potential operators.

The move comes just two months after Dharod’s company filed for bankruptcy. In court filings, the franchisee pointed to several factors behind the financial struggles, including California’s $20-per-hour fast food minimum wage, increased operating costs, declining sales, and what Dharod described as a lack of support and innovation from the Carl’s Jr. brand.

Before anyone starts mourning the Famous Star, it’s worth noting that this is not a companywide shutdown.

Carl’s Jr. has repeatedly stated that the bankruptcy filing is specific to this franchisee and does not affect the broader chain or its other restaurant operators. The brand continues to operate hundreds of locations throughout California and more than 1,000 restaurants nationwide.

There is also a possibility that some of the restaurants could remain open under new ownership. The stores are being marketed as a multi-unit portfolio, and interested buyers have reportedly already emerged. Whether those locations continue operating as Carl’s Jr. restaurants will ultimately depend on franchise approvals and the outcome of the bankruptcy process.

The news adds Carl’s Jr. to a growing list of restaurant chains and franchise operators grappling with rising labor costs, inflation, increased competition, and more cautious consumer spending. In recent months, several major restaurant operators have announced closures, restructurings, or bankruptcy filings as the industry continues to navigate a challenging economic environment.

For now, Carl’s Jr. isn’t going anywhere. But if your local restaurant happens to be one of these franchise-operated locations, it may be worth keeping an eye on what happens next.

2026-06-11T19:39:02Z