A major Carl’s Jr. franchisee, Harshad Dharod, has filed for Chapter 11 bankruptcy protection and is reportedly preparing to close 10 restaurants and sell 49 more across California—an effort tied to rising costs, a $20-per-hour fast-food minimum wage, and inte
On paper, it’s a familiar fast-food scene. In reality, for tens of workers and their managers, it has started to feel like a countdown.
Harshad Dharod, a prominent Carl’s Jr. franchisee, is reportedly preparing to shutter 10 restaurants and sell 49 others across California after filing for bankruptcy protection earlier this year. The reported plan would put 59 locations into motion—closures and transfers—after Dharod’s company entered a court-supervised restructuring under Chapter 11 of the United States bankruptcy code.
Dharod’s Friendly Franchisees Corporation, which describes itself as the largest California-based Carl’s Jr. franchisee, says it has acquired at least 65 locations since 2000. But the latest filings and the reported numbers paint a sharper picture. Operating costs and California’s $20-per-hour fast-food minimum wage have reportedly strained the business. according to coverage tied to the company’s Chapter 11 filing.
The strain isn’t only financial, at least as workers describe it. Employees told the outlet that under staffing, workplace injuries, and violent encounters with customers contributed to the restaurants’ challenges.
Dharod has also pointed the blame outward. He reportedly said the restaurants’ financial struggles were worsened by what he described as a lack of support and innovation from Carl’s Jr.
The bankruptcy filing figures, as described, show a business moving in two directions at once: Dharod’s restaurants generated more than $6 million in monthly revenue while losing more than $600,000 per month in 2026.
A Carl’s Jr. spokesperson has said the restructuring is limited to Dharod’s operations. In a statement, the company representative said it is 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 representative added that “This situation is specific to this individual’s financial and business circumstances.”.
Even so, the practical question for workers is what happens next. If the locations are sold, operations could continue largely uninterrupted, with employees and managers often remaining in place when franchise ownership changes hands.
Interest from potential buyers is already being discussed. According to brokerage firm National Franchise Sales, there is interest from prospective buyers, as reported.
Fox Business reached out to Carl’s Jr., Harshad Dharod and the Friendly Franchisees Corporation for more information.
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