{"id":337666,"date":"2026-05-29T15:31:09","date_gmt":"2026-05-29T15:31:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/337666\/"},"modified":"2026-05-29T15:31:09","modified_gmt":"2026-05-29T15:31:09","slug":"bloodbath-for-carls-jr-as-nearly-50-california-locations-face-ax","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/337666\/","title":{"rendered":"Bloodbath for Carl’s Jr. as nearly 50 California locations face ax"},"content":{"rendered":"

Carl\u2019s Jr. is staring down the potential loss of dozens of California locations after a franchisee and its affiliates filed for bankruptcy protection \u2014 blaming the state\u2019s staggering minimum wage<\/a>.<\/p>\n

Franchisee Sun Gir Inc., which is leading the Chapter 11 action, is putting 49 of its California restaurants up for sale as part of the proceedings.<\/p>\n

Friendly Franchisees Corporation\u00a0CEO and Founder Harshad Dharod said\u00a0the state\u2019s $20 minimum wage in the fast-food sector contributes to the chain\u2019s financial distress ahead of bankruptcy filing under subsidiary Sun Gir, according to Restaurant Dive.<\/a><\/p>\n

A Carl\u2019s Jr. franchisee is putting 49 of its California restaurants up for sale as part of the proceedings. Christopher Sadowski<\/p>\n

Dharod said the minimum wage, enacted in 2024<\/a>, \u201cmaterially increased operating expenses,\u201d and the operator struggled with \u201creduced marketing effectiveness\u201d and a \u201clack of innovation at the franchisor level.\u201d<\/p>\n

Sun Gir has cited \u201csignificant ongoing operating expenses,\u201d worsened by the high minimum wage, for putting in default of its franchisee agreements at a number of locations. It also noted a \u201cfailure to timely pay rent, royalties and other required charges,\u201d per the court filing.<\/p>\n

Sun Gir will use cash collateral to pay about 1,000 of its employees, along with paying rent, insurance, and complete obligations under its franchise and lease agreements, according to Restaurant Dive.<\/p>\n

Despite the bankruptcy proceeding, the company claimed on its website <\/a>that it drove profits and sales \u201cfar above the brand average.\u201d<\/p>\n

California\u2019s $20 minimum wage for fast-food workers has spelled trouble for other restaurants. Getty Images<\/p>\n

Interior of a Carl\u2019s Jr. restaurant. Google Maps<\/p>\n

California\u2019s high fast-food minimum wage has spelled trouble for other fast-food operators<\/a>,<\/p>\n

A study published last year by the National Bureau of Economic Research (NBER) this month found that\u00a0the state\u2019s fast-food\u00a0minimum wage hike<\/a>\u00a0cost the state thousands of jobs.<\/p>\n

Researchers found that the the minimum wage hike<\/a> has cost the fast-food sector 18,000 jobs since it went into effect in April 2024, representing a 3.2% decline in that sector compared to fast-food sectors in other parts of the country.<\/p>\n

\u201cOur median estimate translates into a loss of 18,000 jobs in California\u2019s fast-food sector relative to the counterfactual,\u201d researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer wrote in\u00a0their paper.<\/a><\/p>\n

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