Hardee’s to shut down 77 locations in nine states

Hardee’s Locations to Close Following Bankruptcy Filing

A significant number of Hardee’s restaurants, specifically 77 locations across nine states, are set to shut down. This comes after ARC Burger, LLC, the franchisee behind these stores, declared Chapter 7 bankruptcy.

ARC Burger is one of the largest operators of Hardee’s and is now in the process of liquidating its assets. The closures will affect restaurants in states including Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina, and Wyoming. Any money generated from the liquidation will go to settle debts with creditors.

This situation arises from a protracted legal dispute between ARC and Hardee’s. The chain alleges that its franchisees owe over $6.5 million in unpaid fees and royalties.

It appears that ARC is managing a staggering debt, reportedly exceeding $29 million, owed to more than 5,000 creditors.

In November of last year, Hardee’s took legal action against ARC for breaching their franchise agreement due to unpaid amounts. The company noted that it sought a cooperative approach with ARC to resolve these payment issues, even proposing a payment plan—but ARC did not engage.

Hardee’s stated, “Despite various attempts to reach an agreement, the total owed keeps increasing week by week.” They further mentioned that the franchise agreement with ARC ended last September. However, they allowed ARC to continue operating under the condition that payments were made.

Hardee’s claims ARC failed to honor its payment commitments, despite the suggestion that the restaurants were operating profitably.

Details about where ARC’s financial gains are being directed remain unclear, but they reportedly aren’t being allocated toward outstanding or current fees.