Hardee’s franchise bankruptcy rocks chain after 77 closures

The Hardee’s franchise bankruptcy filed by ARC Burger marks one of the most significant fast-food collapses of 2026. The company filed for Chapter 7 liquidation in U.S. Bankruptcy Court in Georgia last week. Furthermore, the filing comes just four months after ARC shut down 77 Hardee’s locations across nine states in December 2025.

The closures followed a serious dispute between ARC and the Hardee’s parent company. Hardee’s accused the franchisee of violating the terms of its franchise agreement. As a result, ARC closed all 77 locations and now faces full liquidation with no path to recovery.

Hardee’s franchise bankruptcy follows 77 restaurant closures

ARC Burger acquired its Hardee’s locations in 2023. It purchased them through an auction of Summit Restaurant Group’s holdings. At that time, Summit was navigating its own Chapter 11 bankruptcy process. Therefore, ARC entered the Hardee’s system through an already troubled transaction.

The restaurants ARC operated spanned nine states. Those states include Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina, and Wyoming. However, none of those locations are currently open. The Hardee’s website lists all ARC-owned restaurants as temporarily closed.

Following the bankruptcy filing, a judge stayed Hardee’s ongoing lawsuit against ARC. Consequently, that legal action is now paused. Nevertheless, it remains unclear how the bankruptcy process will ultimately affect the shuttered locations or whether any of them will reopen under new ownership.

Hardee’s overall decline continues

The Hardee’s franchise bankruptcy adds to a broader decline for the brand. At the start of 2023, Hardee’s operated 1,754 restaurants across the country. However, by the end of 2025, that number had dropped to 1,571. That represents a loss of more than 180 locations in just three years.

The brand is facing the same pressures squeezing fast-food operators everywhere. Rising food costs, cautious consumer spending, and fierce competition are all making it harder to stay profitable. Moreover, franchise disputes like the one between ARC and Hardee’s are becoming more common as operators struggle to meet brand standards under financial stress.

Additionally, Hardee’s sister company Carl’s Jr. is facing similar trouble. A franchisee operating 65 Carl’s Jr. restaurants recently filed for Chapter 11 bankruptcy protection. That filing signals that the challenges at Hardee’s are not isolated to one bad operator.

A wider fast-food crisis is unfolding

The Hardee’s franchise bankruptcy is part of a much larger trend. Fast-food operators across the country are filing for bankruptcy or closing locations at a rate not seen in years. Several major names are caught up in this wave of financial distress.

Wendy’s has announced plans to close between 298 and 358 U.S. locations in the first half of 2026. That is a significant reduction for one of the country’s most recognized chains. Meanwhile, Fat Brands filed for bankruptcy protection in February 2026. Fat Brands owns 18 restaurant chains, including the following:

1. Fatburger
2. Fazoli’s
3. Johnny Rockets
4. Twin Peaks
5. Smoky Bones
6. Great American Cookies
7. Ponderosa
8. Elevation Burger
9. Round Table Pizza
10. Marble Slab Creamery

Fazoli’s has already closed multiple locations as a result of the Fat Brands filing. That includes two restaurants in West Michigan that served their communities for years before shutting their doors.

Source: MLive / Advance Local Media