Overview
- The Carl’s Jr. operator Friendly Franchisees Corporation and related companies sought Chapter 11 protection in early April in the Central District of California.
- Multiple affiliated entities tied to CEO Harshad Dharod filed together, and Sun Gir Inc. asked the court to combine the cases for more efficient oversight.
- Court papers list each filing entity with less than $50,000 in assets and liabilities, a common approach when separate units hold leases and contracts for a larger restaurant portfolio.
- Carl’s Jr. said the bankruptcy is specific to this franchisee and that other locations remain unaffected, while the debtor has not said whether any of the 65 restaurants will close during the process.
- In a filing, the franchisee cited California’s $20 fast‑food minimum wage, weaker sales, tougher competition, and franchisor turnover, and it reported $19.9 million in first‑quarter net sales alongside a $2 million net loss, defaults on rent and royalties, and plans to use cash collateral to cover payroll for about 1,000 workers and other operating costs.
- Industry reports place this case within a broader 2026 wave of franchisee bankruptcies that has recently included large operators of Popeyes and Applebee’s.