Hardee’s Franchisee Shuts 77 Restaurants, Files for Chapter 7 Amid Legal Fight

A private-equity backed operator that ran Hardee’s outlets in nine states closed all of its units in December and this week moved to liquidate its business, leaving roughly 1,600 workers jobless.

ARC Burger listed itself in court on Monday under Chapter 7, saying its obligations fall somewhere between $10 million and $50 million and that unsecured creditors should not expect recoveries. The filings follow the company’s abrupt December shutdown of 77 Hardee’s locations, a move that ended day-to-day operations across its multi-state network.

The bankruptcy paperwork echoes a dispute between ARC and CKE Restaurants, owner of the Hardee’s brand. CKE sued ARC in November 2025, accusing the operator of falling behind on about $6.5 million in royalties, rent and marketing contributions. ARC replied in March, asserting that when it bought the stores out of bankruptcy in 2023 it inherited properties with worn equipment and deferred upkeep that forced more than $10 million in unplanned repairs. The franchisor has disputed that account, saying payment defaults were the central problem.

ARC’s collapse underscores mounting strains in franchised fast-food chains, where thin margins meet rising real estate and upkeep costs. Industry advisors say deals that hinge on turning around distressed locations often involve costly surprises, and when financing partners push hard, operations can unravel quickly.

A franchise attorney in the region noted the Chapter 7 filing will convert claims into the bankruptcy process and leave staff and vendors to pursue limited recovery through the trustee. For Hardee’s, the company now faces the task of finding new operators or reassigning affected markets if it wants the brand to return to those communities.