A major Carl’s Jr. franchisee is planning to offload 59 locations across California after filing for bankruptcy protection earlier this year.
Harshad Dharod intends to close 10 restaurants and sell 49 others operating under the Anaheim-born fast-food chain, according to the Los Angeles Times.
Dharod’s Friendly Franchisees Corporation, which touts itself as the largest California-based Carl’s Jr. franchisee, has acquired at least 65 locations since 2000, according to its website.
However, rising operating costs and California’s $20-per-hour fast-food minimum wage have reportedly strained the business, prompting the company to file for Chapter 11 bankruptcy protection in April, the Times reported.
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Dharod also blamed what he described as a lack of support and innovation from Carl’s Jr. for the restaurants’ financial struggles, according to the outlet.
Bankruptcy filings reportedly show Dharod’s restaurants generated more than $6 million in monthly revenue while losing more than $600,000 per month in 2026.
Understaffing, workplace injuries and violent encounters with customers also contributed to the restaurants’ challenges, employees told the outlet.
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A spokesperson for Carl’s Jr. previously told Restaurant Business that the restructuring is specific to Dharod’s operations and will not affect other Carl’s Jr. locations.
“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,” a company representative said in a statement.
“This situation is specific to this individual’s financial and business circumstances.
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According to brokerage firm National Franchise Sales, there is already interest from prospective buyers, the Times reported.
If the locations are sold, operations could continue largely uninterrupted, as employees and managers often remain in place when franchise ownership changes hands.
FOX Business reached out to Carl’s Jr., Harshad Dharod and the Friendly Franchisees Corporation for more information.
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