Carl’s Jr. Faces Closure and Potential Sales in California

Carl’s Jr. is facing some tough times as 10 more of its restaurants in California are slated to close, with an additional 10 possibly up for sale. This news adds to the chain’s ongoing struggles.

The franchisee, Hersbad Darod, operates 59 locations throughout the state and has filed for Chapter 11 bankruptcy as of April. He’s now looking for buyers for most of his restaurants, as noted by a report from a news source.

The plan includes the permanent closure of 10 locations, with the rest being offered for sale, according to National Franchise Sales, a brokerage firm.

Most of these eateries are situated in Southern California, where Carl’s Jr. has long been a recognizable fast-food option.

Earlier reports indicated that Darod’s corporation, San Gil, cited California’s $20-an-hour minimum wage as a significant factor in their financial difficulties. In a court document, he stated that this wage hike “significantly increased operating expenses” while weak sales and a lack of effective marketing also contributed to the problems.

Compounding matters, the franchise group has been reportedly losing over $600,000 a month this year, despite bringing in more than $6 million in monthly revenue. However, SKE Restaurants, the parent company of Carl’s Jr., has clarified that this situation is unique to the franchisee and doesn’t reflect the chain’s overall performance.

“This scenario is specific to the financial challenges of this particular franchisee,” the company remarked. “It does not impact operations at other Carl’s Jr. locations.”

The potential closures highlight a challenging period for a brand that started in California back in 1941, when founder Karl Karcher began his journey with a simple hot dog cart in Los Angeles.

Since then, Carl’s Jr. has gained popularity as a prominent fast-food brand on the West Coast, noted for its burgers and distinctive yellow star logo. Yet, its presence in California is shrinking.

Reportedly, Carl’s Jr. had 588 stores in California in 2025, which is a decrease from 613 in 2023 based on franchise disclosure documents.

Interestingly, National Franchise Sales has already received inquiries from potential buyers, which offers some hope that many of these restaurants might continue operating under new ownership. For now, though, the fate of numerous Carl’s Jr. locations hangs in the balance as the bankruptcy process progresses.