Carl's Jr. franchisee collapses under California's rising costs and $20 wage

A major Carl’s Jr. franchisee in California has filed for bankruptcy and will close or sell all 59 of its locations. Harshad Dharod, the owner, points to rising costs and financial losses as key reasons for the decision. The move marks a significant shift for the long-standing burger chain in the state. Dharod’s outlets have faced mounting financial pressure this year. Despite bringing in over $6 million in monthly revenue, the restaurants have lost more than $600,000 each month. He has blamed California’s strict regulations and the recent $20 minimum wage for pushing up labour costs.

The franchisee now plans to shut 10 branches immediately and sell the remaining 49. National Franchise Sales will handle the sale of these locations across Southern and Northern California. Carl’s Jr. and its parent company, CKE Restaurants, have acknowledged the decision but have not commented further.

Dharod has also criticised the lack of support from Carl’s Jr. itself. The chain, which started as a Los Angeles hot dog cart in 1941, has struggled to keep up with newer competitors and shifting consumer tastes. Employees and managers at the affected locations are expected to retain their jobs once new owners take over. The closure and sale of these 59 Carl’s Jr. restaurants will reshape the chain’s presence in California. With financial losses and rising costs driving the decision, the future of these locations now depends on finding buyers. The outcome will also test how the brand adapts to ongoing challenges in the fast-food market.