What Happened to Carl's Jr. Restaurants LLC?

Carl's Jr. Restaurants LLC traces its origins back to 1941 when Carl Karcher and his wife Margaret purchased a hot dog cart in Los Angeles. The business rapidly expanded, leading to the opening of Carl's Drive-In Barbecue in 1945 and the first two 'Carl's Jr.' restaurants in 1956, named as smaller versions of the original drive-in. The company, incorporated as Carl Karcher Enterprises, Inc. in 1966, went public in 1981 and began franchising in 1984, introducing popular menu items like the Western Bacon Cheeseburger and breakfast offerings.

In 1997, Carl Karcher Enterprises (CKE) acquired Hardee's, significantly expanding its footprint, and later rebranded Hardee's to align with Carl's Jr.'s imaging. CKE Restaurants Holdings, Inc., now a privately held company headquartered in Franklin, Tennessee, oversees both brands. As of 2021, Carl's Jr. had 1,062 U.S. domestic locations and 2,124 global locations, with a total of over 3,800 franchised or company-operated restaurants across both chains in 44 states and 43 foreign countries and U.S. territories by 2025.

Recent years have presented a mixed landscape for Carl's Jr. On one hand, the brand has focused on innovation and expansion. In March 2025, Carl's Jr. launched new Triple Burgers and a Tropicali Refresher, aiming to cater to diverse customer preferences. The company also planned to boost its plant-based menu items by 20% by 2025, following its 2019 collaboration with Beyond Meat, and integrate AI-driven drive-thrus and personalized ordering apps to enhance customer experience. Internationally, Carl's Jr. celebrated its 400th restaurant opening in Mexico in December 2024 and is actively pursuing expansion in the UK, with plans for 100 sites by 2029, including new locations opened in 2025. In Australia, after its master franchisee faced difficulties in July 2024, Carl's Jr. shifted to a direct franchise model, planning five new restaurants in 2025.

However, the brand has faced significant domestic challenges. In April 2026, Friendly Franchisees Corporation, a major Carl's Jr. operator with 65 locations in California, filed for Chapter 11 bankruptcy. The franchisee cited California's $20 fast-food minimum wage, which took effect in 2024, as a primary factor for materially increased operating expenses. Additionally, the franchisee pointed to declining sales, reduced marketing effectiveness, and a perceived lack of innovation and executive turnover at the franchisor level as contributing issues. This comes after Carl's Jr.'s U.S. system sales declined 6% in 2025, with average unit volumes dropping 2.7% to $1.4 million, and franchisees closing 40 locations that year. CKE Restaurants has also seen leadership changes, with Joe Guith appointed CEO in March 2025, and a strategic move in April 2024 to separate Carl's Jr. and Hardee's into distinct brands with individual presidents to foster dedicated growth.

As of April 29, 2026, Carl's Jr. is navigating a complex environment of competitive market pressures, evolving consumer demands, and rising operational costs in key regions. Despite these challenges, the company continues its efforts in menu innovation, technological integration, and targeted international expansion, while addressing franchisee concerns and adapting its operational strategies to ensure long-term sustainability.