Hardee’s Franchisee ARC Burger Files for Bankruptcy Amid Legal Dispute

A major franchise operator of Hardee’s has filed for bankruptcy in the United States, marking a significant development in the fast food sector.

According to court documents, ARC Burger LLC filed for Chapter 7 bankruptcy on April 20, 2026, as it faces an ongoing legal dispute with the restaurant chain. Chapter 7 bankruptcy allows for liquidation, meaning the company’s non-exempt assets may be sold to repay creditors.

In its filing, ARC Burger indicated it owes debts to between 5,001 and 10,000 creditors. The company estimated its liabilities to range between $10 million and $50 million, while assets were valued between $500,000 and $1 million. Separate financial disclosures suggested total liabilities exceed $29 million.

The filing further stated that, after administrative costs are covered, no funds are expected to remain for unsecured creditors.

The bankruptcy comes amid a lawsuit filed by Hardee’s in November 2025, accusing ARC Burger of breaching franchise agreements by failing to meet payment obligations. The company alleged that despite attempts to negotiate a repayment plan, the franchisee’s outstanding debt continued to grow, surpassing $6.5 million at the time.

Hardee’s said it terminated its franchise agreements with ARC Burger in September 2025 but temporarily allowed the company to continue operating its outlets while seeking a buyer, provided it stayed current on payments. The chain later alleged that ARC failed to meet this condition.

ARC Burger, backed by private investment firm High Bluff Capital Partners, had been operating 77 Hardee’s locations across multiple states, including Alabama, Florida, Georgia and Missouri.

A court order issued on April 20 indicates that the bankruptcy filing has paused the legal proceedings, as ARC Burger is currently unable to proceed with a counterclaim.

Also Read: KNRA Issues New Radiation Screening Directive for All Cargo Entering Kenyan Ports