Fast-food chain Hardee's closing 77 restaurants across nine states

• ARC Burger is liquidating all assets across Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina and Wyoming, with proceeds going to creditors
• Hardee's sued ARC in November for breach of contract and terminated franchise agreements in September, though allowed continued operations while seeking a buyer contingent on current payments
• Despite allegations that ARC was 'profitably running the restaurants', the franchisee owes $6.5 million to Hardee's and has over $29 million in total liabilities owed to 5,000+ creditors

Summary

Major Hardee's franchisee ARC Burger, LLC has filed for Chapter 7 bankruptcy, resulting in the closure of 77 fast-food locations across nine states: Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina, and Wyoming. The franchisee, described as one of Hardee's largest operators, is liquidating all assets with proceeds going to creditors.

Key Financial Details:

• ARC Burger has accumulated over $29 million in total liabilities
• The company owes money to more than 5,000 creditors
• Hardee's claims ARC owes over $6.5 million specifically in unpaid fees and royalties

Legal Background:

The bankruptcy follows a months-long legal dispute that began when Hardee's filed a lawsuit against ARC in November for breach of contract. Despite Hardee's attempts to establish a payment plan and workout agreement, ARC allegedly refused cooperation and continued accumulating debt weekly.

Hardee's terminated franchise agreements with ARC in September but permitted continued operations while seeking a buyer, contingent on maintaining current payments. According to court filings, Hardee's alleged that ARC was "profitably running the restaurants" but failing to direct those profits toward outstanding obligations.

Market Implications:

This closure represents a significant contraction for Hardee's footprint across multiple states and highlights ongoing challenges in the quick-service restaurant sector, particularly regarding franchisee financial stability. The case underscores the risks large franchise operators face amid economic pressures and the potential ripple effects on brand presence and local employment.