Business & Tech

Major CA Fast Food Franchise Declares Bankruptcy, Closures Possible

The business is partially blaming California's $20 fast food minimum wage for its financial distress, according to reports.

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In this May 25, 2011, file photo, a man walks past a sign for a Carl's Jr. restaurant in San Bruno, Calif.
In this May 25, 2011, file photo, a man walks past a sign for a Carl's Jr. restaurant in San Bruno, Calif. (AP Photo/Jeff Chiu, File)

A Carl’s Jr. franchisee that operates dozens of locations in California has filed for bankruptcy, according to reports.

The Chapter 11 filing from Friendly Franchisees Corp. came earlier this month, with Founder and CEO Harshad Dharod, in a court filing made under subsidiary Sun Gir, partially blaming California’s $20 fast food minimum wage for its financial distress, Restaurant Dive reported.

Sun Gir has 52 Carl’s Jr. restaurants in Southern California and seven in Northern California, according to the outlet. It had $19.9 million in sales in the first three months of 2026 but saw a $2 million loss during the same period, Restaurant Business reported.

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Carl’s Jr. has declared defaults on at least some Sun Gir locations, threatening termination of franchise agreements, according to the outlet.

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