Overview
- The franchisee led by Harshad Dharod filed for Chapter 11 protection in April 2026 and has since moved to close 10 underperforming outlets and market 49 of its 59 California restaurants for sale.
- Bankruptcy filings and a broker helping with the sales show the chain’s California network generated about $6 million in monthly revenue but was losing more than $600,000 per month this year.
- Sun Gir Inc. asked the court to use cash collateral so it can keep roughly 1,000 employees paid and continue paying rent, insurance and franchise and lease obligations while sales and restructuring proceed.
- Dharod’s filings blame the $20 fast‑food minimum wage as a major driver of higher operating costs and also cite predatory merchant cash advances, inflation and reduced franchisor support as contributing factors; CKE Restaurants says the problems are specific to this franchisee.
- The case highlights wider risks for California fast food, with an NBER study estimating about 18,000 sector job losses since the wage change, and buyers already showing interest in the listed restaurants which could preserve many jobs if sales win court approval.