A major Carl's Jr. franchisee plans to close 10 California restaurants and sell 49 others after filing for Chapter 11 bankruptcy protection, cutting loose 59 locations in a restructuring that will reshape one of the chain's biggest state operators.
Friendly Franchisees Corporation, which describes itself as the largest California-based Carl's Jr. franchisee, filed for Chapter 11 protection in April and is now moving to offload stores across the state. Harshad Dharod, who leads the company, had acquired at least 65 Carl's Jr. locations since 2000 before the financial pressure forced the turnaround plan.
The scale of the retreat is stark. Bankruptcy filings reportedly show the restaurants brought in more than $6 million a month in 2026 while still losing more than $600,000 a month, a gap that points to a business generating plenty of sales but not enough profit to keep up with its costs. The planned closures and sales affect a sizeable chunk of Friendly Franchisees' California footprint and leave workers, suppliers and customers waiting to learn which restaurants will be sold and which will shut down.
The company has blamed rising operating costs and California's $20-per-hour fast-food minimum wage for squeezing the business. Dharod also faulted what he described as a lack of support and innovation from Carl's Jr. for the chain's struggles. Employees told the outlet that understaffing, workplace injuries and violent encounters with customers added to the strain inside the restaurants.
Carl's Jr. said the restructuring is limited to Dharod's operations and will not affect other restaurants in the chain. The company also said the case involves a court-supervised restructuring under Chapter 11 and is tied to the franchisee's own financial and business circumstances, not the broader brand.
What remains unresolved is the most immediate detail for employees and local customers: which 10 restaurants will close, which 49 will be sold and when those changes will happen. Until that list is made public, the biggest California Carl's Jr. franchisee is in motion, but its final footprint is not yet fixed.
