Hardee’s franchisee files Chapter 7, workers face liquidation uncertainty

A Hardee’s franchise operator that once controlled 80 restaurants across eight states has filed for Chapter 7 liquidation, a move that can quickly turn into closures, layoffs and a race to pay vendors before the stores go dark.

ARC Burger, LLC filed a voluntary Chapter 7 case in the U.S. Bankruptcy Court for the Northern District of Georgia on April 20, 2026, under case number 26-55202. The filing came after the company lost its franchise agreement and carried more than $29 million in debt, a combination that points to liquidation rather than a restructuring meant to keep the restaurants operating under the same operator.

For the workers tied to those locations, the biggest issue now is not court procedure but what happens on the next schedule. Chapter 7 often means management is trying to wind down a business, not save it, which can leave hourly employees waiting to learn whether shifts will still be posted, paychecks will clear, or jobs will move to a new owner. Hardee’s had already terminated ARC Burger’s franchise agreement in September 2025, after the company began missing required payments in December 2024, according to court-related reporting. Restaurant Business said ARC owed more than $6.5 million in unpaid royalties, marketing funds, rent and related obligations.

The footprint at risk stretches across Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina and Wyoming. Those stores were part of ARC Burger’s 2023 purchase of 80 Hardee’s locations for about $16 million, after the bankruptcy of Summit Restaurant Holdings. What looked like a turnaround buyout two years ago has now turned into another unwind, with the Hardee’s system again losing a major operator.

The collapse lands at a difficult moment for the chain. Restaurant Business has reported that Hardee’s system sales have fallen 12% over the past decade and the brand has shed nearly 200 units in that span. Hardee’s has also been fighting a separate dispute with another large franchisee, Paradigm Investment Group, over operating hours and digital-ordering requirements, underscoring how much pressure the brand has been under at the store level.

Some of the closed Hardee’s restaurants involved in the ARC dispute have already been reopening under corporate ownership, according to a review of job listings reported in April 2026. That suggests a likely split outcome for communities now watching these stores: some locations may be absorbed, some may close for good, and workers may be forced to move quickly if they want to stay in the system.