What Happened to ARC Burger LLC (Hardee's Franchisee)?
ARC Burger LLC, a significant franchisee operating 77 Hardee's restaurants across multiple U.S. states, filed for Chapter 7 bankruptcy liquidation in April 2026. This followed the termination of its franchise agreements and the closure of all its locations in December 2025 due to a breach-of-contract lawsuit filed by Hardee's Restaurants LLC over unpaid fees and substantial debt. The closure highlights broader financial distress within the fast-food franchise sector.
Quick Answer
ARC Burger LLC, a major franchisee of Hardee's, ceased operations and filed for Chapter 7 bankruptcy liquidation in April 2026. The company, which operated 77 Hardee's restaurants, closed all its locations in December 2025 after Hardee's Restaurants LLC sued it for over $6.5 million in unpaid franchise fees and other obligations. Facing more than $29 million in debt, ARC Burger LLC's collapse underscores the challenging economic conditions impacting fast-food franchisees.
📊Key Facts
📅Complete Timeline13 events
ARC Burger LLC Acquires Hardee's Locations
ARC Burger LLC was formed and acquired 77 Hardee's restaurants from Summit Restaurant Holdings, which had previously filed for Chapter 11 bankruptcy.
Subway Continues Significant Store Closures
Subway closed 631 U.S. locations in 2024, continuing a trend of declining store counts over a decade.
Hardee's Sues ARC Burger LLC
Hardee's Restaurants LLC filed a lawsuit against ARC Burger LLC in the U.S. District Court for the Middle District of Tennessee, seeking over $6.5 million in unpaid franchise fees and other obligations.
ARC Burger LLC Closes All 77 Hardee's Locations
Following the lawsuit and termination of franchise agreements by Hardee's, ARC Burger LLC closed all 77 of its Hardee's restaurants across several states.
Wendy's Announces Closure Plans
Wendy's announced plans to close a mid-single-digit percentage of its U.S. locations (around 300) starting in late 2025 and extending through 2026 as part of its 'Project Fresh' initiative.
Subway Closes 729 More Locations
Subway's U.S. store count continued to decline for the tenth straight year, with 729 locations closing in 2025.
The Habit Burger & Grill Closes Locations
The Habit Burger & Grill quietly closed several locations, including one in Parsippany, N.J., citing a 'shift in focus to other areas poised for growth.'
Jack in the Box Plans Up to 100 Closures
Jack in the Box announced plans to close between 50 and 100 locations in fiscal year 2026 as part of its turnaround strategy.
Farmer Boys Franchisee Files Chapter 11
Geddo Corp., a Farmer Boys franchisee operating 12 locations in California and Arizona, filed for Chapter 11 bankruptcy protection due to severe financial distress.
Carl's Jr. Franchisee Files Chapter 11 Bankruptcy
Friendly Franchisees Corporation, an operator of 65 Carl's Jr. locations in California, filed for Chapter 11 bankruptcy protection.
ARC Burger LLC Files Chapter 7 Bankruptcy
ARC Burger LLC, the Hardee's franchisee, filed for Chapter 7 bankruptcy liquidation in the U.S. Bankruptcy Court for the Northern District of Georgia.
The Habit Burger Closes Mooresville, NC Location
The Habit Burger and Grill closed its Mooresville, N.C. location in mid-April, with the restaurant listed as permanently closed on April 21.
Hi-Ho Burgers and Brews Flagship Closes
Hi-Ho Burgers and Brews closed its flagship Dilworth, Minnesota location after 79 years, though another location remains open and a new one is planned.
🔍Deep Dive Analysis
The closure and subsequent bankruptcy of ARC Burger LLC represent a significant event in the recent history of the fast-food industry, particularly for the Hardee's brand. ARC Burger LLC was formed in 2023 when it acquired 77 Hardee's locations from Summit Restaurant Holdings, which itself had filed for Chapter 11 bankruptcy and closed 39 locations. These acquired restaurants spanned several states, including Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina, and Wyoming.
Problems for ARC Burger LLC escalated in November 2025 when Hardee's Restaurants LLC filed a breach-of-contract lawsuit against the franchisee, seeking to recover over $6.5 million in unpaid franchise fees and other obligations. This legal dispute led to the termination of ARC Burger's franchise agreements and the subsequent closure of all 77 Hardee's locations in December 2025. The franchisee then filed a counter-lawsuit, accusing Hardee's of misleading them about the condition of the acquired restaurants and failing to uphold agreements to improve finances.
On April 20, 2026, ARC Burger LLC filed for Chapter 7 bankruptcy liquidation in the U.S. Bankruptcy Court for the Northern District of Georgia, reporting between $500,000 and $1 million in assets and over $29 million in liabilities. Creditors included the Georgia Department of Revenue and the company's employees. The Chapter 7 filing indicates a complete liquidation of assets rather than a restructuring, effectively ending ARC Burger LLC's operations.
This situation is not isolated, reflecting broader struggles within the fast-food sector. Other major chains and their franchisees are also facing financial headwinds, including rising operating costs, increased competition, and more price-sensitive consumers. For instance, Friendly Franchisees Corporation, a Carl's Jr. operator with 65 locations, filed for Chapter 11 bankruptcy in April 2026. Wendy's announced plans to close 5-6% of its U.S. locations (292-350 units) in 2026 as part of a strategic turnaround. Subway has seen a decade-long decline in its U.S. store count, closing thousands of locations between 2016 and 2025. These widespread closures and bankruptcies highlight a period of significant 'rightsizing' and consolidation within the quick-service restaurant industry.
What If...?
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