Carl’s Jr. Faces Bankruptcy, but It’s Not as Widespread as You Think

If you’re a fan of Carl’s Jr., the fast food chain with a strong presence in California, where many of its restaurants are located, you may have heard that the food chain has filed for bankruptcy. And you’re probably wondering what that means for the company and how it could impact its current and future footprint in the U.S., because, as we all know, bankruptcy signals financial struggle and often results in closures of some or all establishments.

For context, Carl’s Jr. has locations in over a dozen states, including Arizona, California, Colorado, Hawaii, Nevada, Oregon, Texas, Utah, and Washington. And while folks are rightfully concerned over the news, there’s actually more to the bankruptcy filing you should know, because it doesn’t affect all Carl’s Jr. locations. Here’s the gist.

Not all Carl’s Jr. restaurants are filing for bankruptcy. It’s actually only a select number of locations that are involved, and they belong to franchisee owner Harshad Dharod, Restaurant Business reported in mid-April 2026.

Like most fast-food establishments, each location is franchised out. But in this case, Dharod owns many Carl’s Jr. restaurants, and his company, Friendly Franchisees Corp., operates them. Friendly Franchisees Corp. is the company that has declared Chapter 11 bankruptcy, and it is currently responsible for overseeing operations for 65 Carl’s Jr. locations in California.

And that’s not the only entity Dharod has filed bankruptcy for. Others include Third Star Investments, Sun Gir, Inc., Senior Classic Leasing, Second Star Holdings, and DFG Restaurants, according to court filings, per Restaurant Business.

According to the outlet, “Sun Gir is asking a court to manage each of those cases together,” and each case has estimated its assets and liabilities to be under $50,000.

So what’s going on, and what prompted the bankruptcy? A representative for Dharod is chalking the filing up to “operator-specific challenges.”

Now, it’s worth pointing out that Chapter 11 bankruptcy doesn’t mean the company behind these Carl’s Jr. locations is going under. It simply means the company is looking to restructure its debt. This way, the business can remain open and operating, and even borrow new money, per the United States Courts website. A Chapter 11 debtor is also assigned to help with the reorganization process so the company can come out of it in a better financial state.

CKE Restaurants Holdings, Inc., owner of the Carl’s Jr. brand, has spoken out regarding the bankruptcy filing.

In a statement, per Restaurant Business, the company said, "We are aware that Carl’s Jr. franchisee Harshad Dharod entities and its affiliates, which together independently own and operate certain Carl’s Jr. restaurants in California, have entered into a court-supervised restructuring process under Chapter 11 of the United States Bankruptcy Code.”

The rep added, “This situation is specific to this individual’s financial and business circumstances,” and reassured that the filing would have “no impact on the operations of any other Carl’s Jr. locations.”

So basically, the filing is selective and only impacts the restaurants owned by Dharod, not the entire Carl’s Jr. brand.