A Carl's Jr. in is among 10 California locations at risk of closing after one of the chain's largest franchise operators filed for protection.
A Reseda Carl's Jr. is among 10 California locations at risk after Friendly Franchisees Corporation filed Chapter 11 bankruptcy, citing California's $20 minimum wage and falling sales as primary causes.
A Carl's Jr. in is among 10 California locations at risk of closing after one of the chain's largest franchise operators filed for protection.
Friendly Franchisees Corporation, which runs roughly 59 Carl's Jr. restaurants across California, asked a federal court to reject leases at 10 underperforming locations. The Reseda restaurant is on that list, alongside sites in Tarzana, Arcadia, Covina, Pomona, Granada Hills, Santa Rosa, Diamond Bar, Pasadena, and San Gabriel, according to reporting from Fast Company.
Chapter 11 is a restructuring process. It does not mean the Reseda Carl's Jr. will shut its doors immediately. The filing allows the company to renegotiate debts, sell assets, or find new ownership while staying open.
But the lease rejection request signals the court has already flagged the Reseda location as underperforming. If the court approves the lease rejection and no buyer steps in, the restaurant could close.
Friendly Franchisees employs roughly 1,000 workers across its 59 California locations. Court documents show the operator generated approximately $19.9 million in net sales during the first three months of 2026, averaging between $6 million and $7 million per month. Despite that revenue, the company posted a net loss of around $2 million in the same period, according to bankruptcy filings.
Harshad Dharod, CEO and founder of Friendly Franchisees, pointed to California's $20 fast-food minimum wage as a primary driver of the financial collapse. The wage increase, which took effect in April 2024, "materially increased operating expenses," Dharod stated in court filings tied to subsidiary Sun Gir.
Dharod also cited weakening sales, tougher competition, and what he described as a "lack of innovation at the franchisor level." He noted that "reduced marketing effectiveness" and executive turnover within the wider Carl's Jr. system contributed to operational difficulties, according to the filings.
The broader Carl's Jr. brand has already shrunk its California footprint. The chain operated 613 locations in 2023 and had reduced that to 588 by 2025, according to franchise documents cited by the Daily Mail.
The bankruptcy comes as Carl's Jr. faces labor unrest on the ground. The California Fast Food Workers Union announced strikes at Carl's Jr. locations last week over what it described as unsafe working conditions, understaffing, and wage issues.
"Nearly every day we're subjected to aggressive and violent behavior by angry customers who yell at us and throw food at us," the union claimed in a statement.
Workers alleged they have experienced "several violent attacks and robberies" over the past year. Among the incidents cited was one case in which a customer allegedly threatened to hit an employee with a frying basket before punching her in the face. In another incident, a worker reportedly had cash stolen directly from her hand.
"We live in fear just walking to work from the parking lot," the union said.
One employee shared comments on Instagram alleging chronic understaffing and inadequate supplies.
"I'm on strike at Carl's Jr. because my coworkers and I have experienced chronic understaffing, lack of proper cooking and cleaning supplies, and inadequate personal protective equipment," the worker said.
The employee also alleged that staff were sometimes required to work off the clock and miss legally mandated breaks.
Carl's Jr. traces its roots to a hot dog cart in Los Angeles and grew into one of California's most recognizable fast-food brands. The chain is known for charbroiled burgers, Western Bacon Cheeseburgers, and crisscut fries.
Last year, the brand hired TikTok star Alix Earle as the face of its Super Bowl campaign. But behind the marketing, consumer spending at Carl's Jr. dropped 4 percent in 2025, according to Circana data cited by the Daily Mail.
Carl's Jr. has stated the bankruptcy is tied to this specific franchisee and does not affect the entire brand. The chain still operates hundreds of restaurants in California and across the country.
For now, the Reseda Carl's Jr. remains open. But the bankruptcy filing raises questions about how long it can stay that way.
"California's war on basic economics continues to rack up losses," said Jonathan Turley, a law professor at George Washington University, commenting on the broader pressures facing restaurant operators in the state.
This article was generated with AI assistance.