TL;DR
A large Carl’s Jr. franchise operator in California is closing 10 restaurants and attempting to sell dozens more due to financial pressures linked to the $20 minimum wage. The move reflects broader challenges for the chain in the state.
A major California Carl’s Jr. franchise operator is closing 10 restaurants and attempting to sell dozens more, citing financial difficulties linked to the recent $20 minimum wage law. The move impacts roughly 1,000 employees and highlights broader financial pressures facing the chain in the state.
Friendly Franchisees Corporation, the franchisee behind 59 Carl’s Jr. locations across California, filed for Chapter 11 bankruptcy protection in April amid mounting financial challenges. Court documents show the company aims to reject leases at 10 underperforming restaurants, with plans to sell the remaining locations through National Franchise Sales, which reports interest from prospective buyers.
Among the locations identified for closure are sites in Tarzana, Arcadia, Covina, Pomona, Granada Hills, Reseda, Santa Rosa, Diamond Bar, Pasadena, and San Gabriel. These outlets have struggled financially since California implemented a $20 minimum wage for fast-food workers in April 2024. The franchisee states that rising operating costs, increased competition, and declining sales have led some locations to operate at steep losses, with the entire chain losing over $600,000 monthly this year.
One specific location in Arcadia reportedly lost more than $400,000 over two years. The company’s filings reveal that the chain’s California locations have decreased from 613 in 2023 to 588 in 2025, with consumer spending at the chain falling 4% last year, according to reports.
Implications of Franchise Closures for California Fast Food
This development underscores the financial strain the $20 minimum wage law has placed on fast-food franchises in California, potentially leading to job losses and reduced availability of certain restaurant options. It also signals broader economic pressures facing the industry, which may influence future franchise operations and employment policies in the state.
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Background on Carl’s Jr. in California and Recent Challenges
California has seen a decline in Carl’s Jr. locations over the past two years, from 613 in 2023 to 588 in 2025. The chain has experienced a 4% drop in consumer spending last year, and many outlets have reported financial losses. The recent $20 minimum wage law, implemented in April 2024, has been cited by franchise operators as a significant factor in rising costs and declining profitability, prompting some to seek bankruptcy protection and sale of their locations.
“This situation is specific to this individual franchisee’s financial and business circumstances.”
— a spokesperson for the franchisee
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Uncertainties About Future Operations and Sales
It is not yet clear how many of the remaining locations will continue operating after the sale process or how long the closures will take to complete. The full financial impact on Carl’s Jr. in California and the chain’s overall strategy moving forward remain uncertain.
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Next Steps in Franchise Sale and Industry Impact
The franchisee’s locations are expected to be sold in the coming months, with ongoing negotiations and potential new ownership. Industry analysts will monitor how these closures influence the chain’s presence in California and whether similar financial pressures lead to further closures or restructuring within the fast-food sector.
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Key Questions
How many Carl’s Jr. locations are affected in California?
At least 10 locations are confirmed to be closing, with plans to sell dozens more, affecting a total of 59 locations operated by the franchisee.
What caused these closures and sales?
The franchisee cites rising operating costs, increased competition, and declining sales since the implementation of California’s $20 minimum wage for fast-food workers as primary factors.
Will all remaining locations stay open?
It is unclear how many of the remaining locations will continue operating after the sale process, as negotiations are ongoing and some sites may also face closure.
Is this part of a broader trend in California fast food?
Yes, the chain has seen a decline in store count and sales in California, indicating broader financial challenges within the industry.
What will happen to the employees at these closing locations?
Employees at the affected locations may face layoffs or transfers, depending on the outcome of the sale and closure process. Specific details have not been announced.
Source: Google Trends
