California Carl’s Jr. Franchisee Moves to Close 10 Restaurants as $20 Wage Fight Hits Home.

For decades, Carl’s Jr. has felt like part of California’s roadside rhythm , the yellow star, the charbroiled smell, the late-night burger run after work, school, or a long drive home. Now, one of the chain’s largest California franchise operators is trying to shut down 10 restaurants and sell dozens more, putting a familiar fast-food name at the center of a much bigger fight over wages, costs, and survival in the state’s restaurant business.

Friendly Franchisees Corporation and affiliated companies tied to Harshad Dharod filed for Chapter 11 bankruptcy protection in April. The companies operate 59 Carl’s Jr. restaurants in California, according to court-related reporting, and employ about 1,000 workers. As part of the bankruptcy process, the franchisee is seeking to reject leases at 10 underperforming restaurants and sell 49 other locations.

The company has blamed several pressures, including California’s $20 minimum wage for covered fast-food workers, rising operating costs, stronger competition, and weaker sales. That wage law took effect on April 1, 2024, and applies to many limited-service restaurant chains with at least 60 locations nationwide.

The Closures Would Hit Familiar California Corners

The locations identified as possible closures are not random dots on a spreadsheet. They sit in neighborhoods where customers know the drive-thru pattern, workers know the lunch rush, and families know the cheapest combo that can stretch a tight budget.

The 10 restaurants listed in the reports are located in Tarzana, Arcadia, Covina, Pomona, Granada Hills, Reseda, Santa Rosa, Diamond Bar, Pasadena, and San Gabriel. Some have reportedly been operating for decades, meaning the closures would erase more than a place to grab fries. They would remove a small part of the local routine.

Court filings described the targeted restaurants as underperforming locations, creating financial strain. One Arcadia restaurant reportedly lost more than $400,000 over a two-year period. For a franchisee already navigating bankruptcy, losses like that become difficult to carry, especially when multiple locations are struggling at once.

Still, a lease rejection does not always mean every door closes immediately. Some restaurants could remain open if buyers step in or deals are reached. National Franchise Sales is overseeing the sale of the other 49 locations, and there has reportedly been interest from potential buyers.

A $20 Wage Became the Flashpoint.

The bankruptcy has quickly become part of California’s heated debate over the fast-food wage law. Supporters of the $20 minimum wage argue that fast-food workers need higher pay to survive in one of the most expensive states in America. Rent, groceries, gas, insurance, and childcare have all eaten into paychecks, leaving many workers with little breathing room.

Restaurant operators tell a different story. They say higher wages arrived on top of food inflation, insurance costs, rent pressure, utility bills, crime concerns, and customers pulling back from higher menu prices. In that environment, even a busy restaurant can struggle if every sale costs more to produce.

Sun Gir Inc., the lead debtor in the case, said its restaurants generate more than $6 million in monthly revenue but have still been losing more than $600,000 per month this year. That figure shows the strange math of modern fast food: plenty of sales at the register, but not enough profit after payroll, rent, supplies, fees, and debt.

The $20 wage is not the only factor contributing to the financial trouble. The filings also point to competition and declining sales. That matters because the story is not as simple as one law closing one burger chain. It is a collision of higher worker pay, thinner restaurant margins, changing customer habits, and a California cost structure that continues to squeeze everyone.

Carl’s Jr. Says the Brand Is Not Collapsing

Carl’s Jr. has tried to draw a clear line between this bankruptcy and the wider chain. A company spokesperson said the situation is specific to one franchisee’s financial and business circumstances and “has no impact” on other Carl’s Jr. locations.

That distinction is important. Carl’s Jr. still has more than 1,000 locations across the United States and remains one of California’s most recognizable fast-food brands. The company was founded in 1941 and built much of its identity around West Coast burger culture.

But California is no longer the easy-growth market it once was. Fast-food operators now face a customer who wants value, a worker who needs a livable wage, and a business model that depends on speed, volume, and tight cost control. When one of those pieces slips, the whole machine can shake.

For workers, the uncertainty is personal. Bankruptcy language can sound cold, but behind every lease rejection are cooks, cashiers, shift leads, cleaners, and managers wondering whether their next shift will be their last. For customers, the impact may show up as longer drives, fewer late-night options, or another empty storefront in a shopping center already fighting vacancies.

The Carl’s Jr. case also raises a question California cannot dodge: how should the state balance better wages with the survival of businesses that employ thousands of hourly workers? Higher pay can change lives. Closed restaurants can end jobs. Both truths can exist at the same time.

That is what makes this story bigger than burgers. It is about the price of doing business in California, the price of living there, and the uncomfortable space between the two. If these 10 restaurants go dark and 49 others change hands, the yellow star will still shine across the state , but for many neighborhoods, it may feel a little less certain than before.