65-Unit Carls Jr. Operator in California Seeks Bankruptcy Protection

Restaurant Dive recently reported that Friendly Franchisees Corporation, a major Carl’s Jr. operator in California, filed for Chapter 11 bankruptcy protection through the U.S. Bankruptcy Court in the Central District of California. The filing covers multiple subsidiaries, including Senior Classic Leasing, DFG Restaurants and Second Star Holdings, and affects a 65-unit portfolio the company has operated for more than two decades.

Friendly Franchisees Corporation is led by CEO and Founder Harshad Dharod, who acquired the Carl’s Jr. restaurants in 2000. According to the company’s website, the business also invests in and operates multifamily real estate, though court filings did not make clear whether the bankruptcy was tied primarily to restaurant operations, real estate holdings or a combination of both. That uncertainty leaves open questions about what comes next for the stores and whether the filing will ultimately result in closures, restructuring or asset sales.

Carl’s Jr. said the filing is limited to this operator and does not reflect a wider issue across the system. “This situation is specific to this individual franchisee’s financial and business circumstances,” a spokesperson said in a statement. “This has no impact on the operations of any other Carl’s Jr. locations, and we remain committed to delivering quality experiences for our guests, while driving profitable, sustainable growth for our franchisees and brand.”

There is also the matter of scale. Restaurant Dive reported that Carl’s Jr. had 588 restaurants in California as of 2025, down from 613 in 2023. Since 65 of those stores are tied to Friendly Franchisees Corporation, the filing reaches a noticeable portion of the brand’s California base.

The filing also arrives at a time when many restaurant operators are facing pressure from softer consumer spending and declining traffic. According to the Restaurant Dive report, Carl’s Jr. posted an estimated average unit volume of $1.4 million in 2025, based on Circana’s Definitive U.S. Restaurant Ranking 2026. Circana also estimated that consumer spend at Carl’s Jr. fell 4% to just over $1.4 billion while the chain’s location count dropped 3% in 2025.

Friendly Franchisees Corporation’s filing shows that the pressure in the restaurant business is not limited to newer or smaller operators. What happens next with these Carl’s Jr. locations is still unknown, but the case joins a broader run of financial troubles across the industry in 2026.

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