Hardee’s operator files for Chapter 7 bankruptcy

ARC Burger’s 77 stores have been closed since December, following a lawsuit by Hardee’s against the operator.

• ARC Burger, once a major Hardee’s franchisee, filed for Chapter 7 Bankruptcy protections earlier this week, court records show .

• ARC closed its 77 Hardee’s locations in December 2025 after the brand sued the franchisee in November for allegedly breaching its franchise agreements, according to an amended complaint filed by Hardee’s.

• The Hardee’s units operated by ARC were previously owned by Summit Restaurant Group. ARC, a subsidiary of High Bluff Capital Partners according to the lawsuit, acquired the restaurants in 2023 during an auction of Summit’s holdings as part of that company’s Chapter 11 Bankruptcy process .

It is unclear if the bankruptcy proceedings will impact or lead to a potential reopening of ARC’s 77 restaurants. A judge stayed Hardee’s ongoing suit against ARC as a result of the bankruptcy filing.

Restaurant Dive called several of the restaurants listed as owned by ARC in Hardee’s franchise disclosure document, but the phone calls could not be completed as dialed. Those locations are listed on Hardee’s site as temporarily closed. In the bankruptcy case that ended with ARC acquiring the restaurants, Summit said its stores suffered from long-term declines in foot traffic, exacerbated by high occupancy costs .

ARC’s store system included units in Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina and Wyoming.

The bankruptcies of large Hardee’s operators could indicate broader problems for CKE’s brand. Hardee’s unit count has eroded in recent years, falling from 1,754 at the start of 2023 to 1,571 at the end of 2025, per its FDD.

The chain also has a relatively low average unit volume for a burger brand, at $1.2 million in fiscal year 2025, per its FDD. That figure is significantly below Burger King ($1.7 million) and Wendy’s ($2.0 million for franchised stores) 2025 figures, according to their respective FDD’s. It’s also lower than McDonald’s AUV ($3.8 million), though that brand’s FDD only has 2024 sales figures.

Hardee’s sister brand, Carl’s Jr., has also struggled recently, with a 65-unit operator filing for bankruptcy in California earlier this month . CKE has been working to give Hardee’s and Carl’s Jr. more distinct brand identities since at least 2024 , in hopes of strengthening the brands.

High Bluff Capital, the parent company of ARC, also owns Church’s Chicken, Quiznos and Taco Del Mar, according to its website . ARC’s Chapter 7 filing lists assets at between $500,000 and $1 million, and liabilities between $10 million and $50 million.