A Hardee’s burger chain franchisee that once operated dozens of locations across nine states has filed for Chapter 7 bankruptcy liquidation, adding another casualty to a fast-food industry battered by closures and financial distress.
ARC Burger LLC, based in Marietta, Ga., filed for Chapter 7 bankruptcy liquidation on Monday in the U.S. Bankruptcy Court for the Northern District of Georgia, reporting more than $29 million in total debt, according to the Atlanta Business Chronicle. The case has been assigned petition No. 26-55202, according to PacerMonitor. Robert Matthew Martin, an attorney at Dentons US LLP, represents the debtor.
Among its creditors are the Georgia Department of Revenue, owed $403,569 in taxes, and former employees owed approximately $19,000 in unpaid wages.
ARC Burger was owned by High Bluff Capital Partners, the same private-equity firm that owns Church’s Chicken, Taco Del Mar and Quiznos. The company acquired 80 Hardee’s locations in 2023 for $16 million from Summit Restaurant Holdings after that entity filed for Chapter 11 bankruptcy and shuttered 39 locations. ARC Burger operated restaurants in Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina and Wyoming.
The franchisee’s troubles intensified in late 2025. Hardee’s terminated ARC Burger’s franchise and sublease agreements in September 2025 but allowed the franchisee to continue operating temporarily while both parties sought a buyer, provided payments were maintained. On Nov. 21, 2025, Hardee’s Restaurants LLC filed a lawsuit in the U.S. District Court for the Middle District of Tennessee seeking to recover over $6.5 million in unpaid royalties, advertising fees and rent obligations that allegedly began accruing in December 2024.
Despite issuing two notices of default and offering a repayment plan, Hardee’s said ARC Burger refused the proposed terms. The franchisee ultimately closed all 77 locations still operating in the Mountain West, Midwest and Southeast before the bankruptcy filing. The Chapter 7 petition invokes an automatic stay on all pending legal actions against the debtor while the case proceeds.
ARC Burger’s collapse is the latest in a series of franchise disputes roiling Hardee’s parent, CKE Restaurants Holdings. Another franchisee, Paradigm Investment Group, which operates 76 Hardee’s restaurants in Alabama, Florida, Mississippi and Tennessee, sued CKE affiliate Hardee’s Restaurants LLC in April 2025 after receiving two default notices over demands that its locations remain open past 2 p.m., pay digital fees and participate in loyalty programs. A jury trial in that case is set for March 30, 2027, in the U.S. District Court for the Middle District of Tennessee, with Paradigm seeking $35 million in compensatory damages plus costs and fees.
The turmoil at Hardee’s mirrors broader stress across the fast-food industry. Wendy’s has said it will close between 292 and 350 underperforming U.S. locations in 2026. Friendly Franchisees Corporation, one of California’s largest Carl’s Jr. operators, filed for Chapter 11 on April 2, putting 65 restaurants into court-supervised restructuring. And Sailormen Inc., a Miami-based Popeyes franchisee operating 136 locations in Florida and Georgia, filed for Chapter 11 in January, citing approximately $130 million in debt stemming from inflation, rising borrowing costs and post-pandemic shifts in consumer habits.
A typical Hardee’s restaurant generates less than $1.2 million in annual revenue, compared to roughly $2 million for a Wendy’s location and $3.9 million for a typical McDonald’s — a disparity that leaves the brand with limited margin to absorb franchise disputes or mounting cost pressures.
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