TL;DR
A large Carl’s Jr. franchise operator in California is planning to close 10 locations and sell dozens more due to financial difficulties. The company blames rising costs after California’s $20 minimum wage law took effect in April 2024. The closures are part of bankruptcy proceedings and ongoing efforts to find buyers.
A major California Carl’s Jr. franchise operator is closing 10 locations and seeking to sell dozens more due to financial challenges exacerbated by California’s recent $20 minimum wage law for fast-food workers, according to court filings and reports.
Friendly Franchisees Corporation, the operator of 59 Carl’s Jr. locations across California, filed for Chapter 11 bankruptcy protection in April 2024. Court documents reveal that the company plans to reject leases at 10 underperforming restaurants, with the aim of selling the remaining locations. The closures and sales are driven by increased operating costs, declining sales, and mounting losses.
Specifically, the company reports that its restaurants, which generate over $6 million in monthly revenue collectively, are losing more than $600,000 each month. One location in Arcadia reportedly lost over $400,000 in two years. The company attributes these financial difficulties to the impact of California’s $20 minimum wage law, which took effect in April 2024, along with rising competition and other economic pressures. The sale process is managed by National Franchise Sales, which reports interest from prospective buyers.
Impacts of California’s $20 Minimum Wage on Fast-Food Chains
This development highlights the financial strain that recent wage law increases can place on franchise operators, potentially leading to closures and consolidation in the fast-food industry. It also signals broader challenges for Carl’s Jr. locations in California, where store counts have already declined, and consumer spending has fallen, affecting the chain’s overall presence in the state. The closures could influence employment and local economies in affected areas.
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Recent Trends in California Fast-Food Industry
California’s fast-food sector has experienced notable shifts in recent years, with store counts declining from 613 locations in 2023 to 588 in 2025 for Carl’s Jr. alone. The state’s $20 minimum wage law, implemented in April 2024, has been linked to rising operating costs and financial stress for some franchisees. Industry-wide, consumer spending at fast-food chains has decreased by approximately 4% last year, further impacting sales and profitability.
“This situation is specific to this individual franchisee’s financial and business circumstances. This has no impact on the operations of any other Carl’s Jr. locations.”
— a company spokesperson
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Details on Which Locations Will Remain Open
It is not yet clear how many of the remaining Carl’s Jr. locations operated by the franchisee will stay open after the sale process concludes. The exact timeline for closures and sales is also still developing, and the final impact on employment and local communities remains uncertain.
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Next Steps in the Sale and Closure Process
The sale of the remaining locations is ongoing, with National Franchise Sales managing the process. Prospective buyers are expressing interest, and the company aims to finalize sales in the coming months. Meanwhile, the franchisee continues to evaluate options for its other locations, with the potential for further closures depending on sales outcomes and market conditions.
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Key Questions
How many Carl’s Jr. locations are affected?
Ten locations are confirmed to be closing, with dozens more potentially sold or affected by the ongoing bankruptcy proceedings.
What caused these closures?
The franchise operator cites increased operating costs, declining sales, and the financial impact of California’s $20 minimum wage law as key factors.
Will other Carl’s Jr. locations in California be affected?
There is no indication that the closures will impact other locations outside of the franchisee’s holdings; the company states it is an isolated case.
When will the closures and sales be finalized?
The process is ongoing, with no specific date yet announced. Finalization depends on the sale negotiations and market conditions.
How does this affect employees?
Employees at the affected locations may face layoffs or job transitions depending on the final sale and closure decisions, but specific details are not yet available.
Source: Google Trends
