One of the largest Carl's Jr. operators in California is preparing to exit the business after announcing plans to close 10 restaurants and sell nearly every remaining location in its portfolio. The move marks a dramatic escalation in the bankruptcy proceedings of franchisee Friendly Franchisees Corporation and its founder, Harshad Dharod, who filed for Chapter 11 protection earlier this year.
According to newly disclosed court filings obtained by Penn Live, Dharod intends to shutter 10 locations outright while putting 49 others on the market. If completed, the plan would leave him with little to no presence in the Carl's Jr. system after more than two decades as one of the chain's most prominent operators. The restaurants are spread across Northern and Southern California, and collectively employ close to 1,000 workers.
The development represents a stunning reversal for a franchisee whose story was once viewed as a fast-food success story. Dharod immigrated from India to the United States to pursue a medical degree and took a job at Jack in the Box to help cover expenses. He eventually became a franchise owner, operating 19 Jack in the Box locations before selling them and, in 2000, acquiring a large Carl’s Jr. portfolio.
Over the years, Friendly Franchisees grew into what it described as the largest Carl's Jr. franchisee in California.
In bankruptcy court, Dharod pointed to mounting financial pressure from several directions. He argued that California's $20 minimum wage for fast-food workers, which took effect in 2024, "materially increased operating expenses" across his restaurants.
Despite generating between $6 million and $7 million in monthly revenue, the locations were reportedly losing more than $600,000 per month this year. Dharod also cited declining sales, increased competition, and what he described as insufficient innovation and support from parent company CKE Restaurants.
The latest announcement builds on the bankruptcy filing submitted in April, when Friendly Franchisees and several affiliated entities sought Chapter 11 protection. At the time, the filing signaled financial distress but left open the possibility of restructuring.
National Franchise Sales has been retained to market the 49 restaurants, and brokers say potential buyers have already expressed interest.
A spokesperson for Carl's Jr. said that the situation is unique to Dharod's operation and does not affect other franchisees.
