Dozens of Hardee’s stores across the United States are set to close after one of its largest franchisees allegedly failed to make the latest payment.
ARC Burger, which is managed by High Bluff Capital Partners, is currently suing Hardee over failure to pay franchisees and other contractual obligations with the company, according to court documents obtained by USA TODAY. In response to the lawsuit filed last month, ARC Burger has decided to close its Hardee’s locations.
In an emailed statement to USA TODAY, Hardee’s Restaurants confirmed the closure of all franchised restaurants.
“These closures are the result of ARC Burger’s failure to cure its defaults under the franchise agreement, despite strong sales and months of continued attempts to reach a resolution that would keep these restaurants open,” Hardee’s said.
According to the complaint, ARC Burger owns 77 Hardee’s locations in Alabama, Florida, Georgia, Illinois, Missouri, Montana, South Carolina and Wyoming.
Closed lawsuit
According to court documents, ARC Burger began failing to make payments in December 2024.
“As a result of ARC’s failure to make timely payments over several months, HR (Hardy’s) has notified ARC that it is in default under the franchise agreement and sublease agreement,” the complaint states.
Hardee’s said in its lawsuit that unpaid debts include royalties, advertising fund contributions, technology fees, training fees, rent and taxes.
“Wherever ARC’s profits go, they do not apply to past due or ongoing fees owed (to Hardee’s),” the burger giant argued in its lawsuit.
ARC Burger could not be reached for comment regarding Hardee’s closure.
Fernando Cervantes Jr. is a trending news reporter for USA TODAY. Contact us at fernando.cervantes@gannett.com and follow us at X @fern_cerv_.
