77 Hardee’s Locations Close Across 8 States as Franchise Deal Falls Apart
Dozens of Hardee’s restaurants have shut their doors after a major franchise agreement unraveled, marking another setback for the long-struggling fast-food brand. In total, 77 locations have closed across eight U.S. states, affecting workers, communities, and the chain’s shrinking domestic footprint.
The closures stem from a legal dispute between Hardee’s and one of its largest franchise operators, ARC Burger. The operator had acquired the restaurants just two years ago after purchasing them out of bankruptcy, raising fresh questions about the stability of large-scale franchise deals in today’s restaurant economy.
For customers, the sudden shutdowns have been jarring. Many locations closed with little warning, leaving employees scrambling for answers and loyal diners discovering their neighborhood Hardee’s was suddenly gone.
What Happened to the Franchise
The closures follow a lawsuit filed by Hardee’s against ARC Burger, a 77-unit franchisee owned by High Bluff Capital. According to court filings, Hardee’s alleges the franchisee failed to pay more than $6.5 million in royalties, rent, and marketing fees, putting the operator in default under its franchise agreements.
ARC Burger had purchased the restaurants in 2023 after the previous owner, Summit Restaurant Holdings, filed for bankruptcy. Hardee’s said it attempted to negotiate a workout agreement, but claims the franchisee refused to resolve the mounting unpaid obligations, prompting the company to terminate the franchise and sublease agreements.
The lawsuit ultimately led ARC Burger to close all of its Hardee’s locations. In a statement to USA Today, Hardee’s confirmed that all 77 franchised restaurants owned by ARC Burger would be shuttered as a result of the dispute.
Why the Closures Span Eight States
The affected Hardee’s locations were spread across Alabama, Florida, Georgia, Illinois, Missouri, Montana, South Carolina, and Wyoming, underscoring how a single franchise failure can ripple across large geographic regions. For many smaller towns, the closures remove one of the few remaining fast-food employers in the area.
Industry analysts say the dispute reflects deeper challenges facing Hardee’s. The brand has struggled with declining sales, weak unit economics, and frequent executive turnover for years. According to industry data, Hardee’s domestic system sales are down roughly 12% over the past decade, and the chain has shed nearly 200 U.S. locations during that time.
Compounding the issue, Hardee’s franchisees have clashed with the company over technology fees, digital ordering requirements, and operating hours. Some operators argue that complying with modern system standards has become financially unsustainable given low average restaurant revenues compared with competitors like Wendy’s and McDonald’s
What the Closures Signal for Hardee’s Future
The collapse of the ARC Burger franchise deal adds to growing concerns about Hardee’s long-term viability in the U.S. market. With lenders reportedly hesitant to finance the brand and multiple franchise disputes unfolding at once, analysts say further consolidation or closures may be difficult to avoid.
Hardee’s has said the closures were necessary due to contractual defaults, but the situation highlights the fragile balance between franchisors and operators in an era of rising labor costs, tighter credit, and changing consumer habits. Even large franchise groups can struggle to keep locations profitable under current conditions.
For now, the 77 closed restaurants stand as another chapter in Hardee’s prolonged contraction. Whether the chain can stabilize its remaining footprint may depend on resolving franchise conflicts, improving unit economics, and restoring confidence among operators willing to invest in the brand.
