Harshad Dharod Files Bankruptcy for 59 Carls Jr Outlets
carls jr franchisee Harshad Dharod filed for bankruptcy protection last month for 59 outlets as California’s $20 per hour fast-food wage pushed labor costs higher. Close to 1,000 employees now sit inside a business reorganization that leaves the stores operating, most of them in Southern California.
Dharod’s 59-outlet filing
59 outlets are tied to the filing, making Dharod one of the larger Carl’s Jr. operators in the state. In a filing with a Central District bankruptcy court, he said, "This distress was driven by a significant increase in labor costs following changes to California law establishing a $20 per hour minimum wage for fast food workers."
Close to 1,000 employees work for the franchisee, so the bankruptcy reaches far beyond a balance sheet. For workers, that means their paychecks and schedules now sit under a court process tied to cost pressures rather than a store-by-store shutdown.
Southern California stores still open
Almost all of the stores are in Southern California, and they remained in operation as of mid-May. That combination matters because the filing did not immediately remove the chain’s day-to-day presence in the region, even as the owner seeks protection from creditors.
Workers in North Hollywood have also described robberies and physical assaults, with Elizabeth Alvarado saying, "It’s a problem from the top. They don’t want to spend," about working conditions. The safety complaints and the labor-cost squeeze now sit on top of the same franchise network, adding another layer to the strain inside the stores.
CKE links it to one operator
Carl’s Jr. and CKE Restaurants said the situation is specific to this individual franchisee’s financial and business circumstances, and added, "We remain committed to delivering quality experiences for our guests, while driving profitable, sustainable growth for our franchisees and brand." That leaves the immediate burden on Dharod’s operation, not the broader chain.
The brand’s roots stretch back to 1941, when Carl’s Jr. began as a hot dog cart on the corner of Florence and Central in Los Angeles, and to 1946, when it opened its first sit-down restaurants with expanded menus in Anaheim. Carl Karcher died on Friday, a reminder of how far the chain has traveled from its local start to a system now pressured by California labor costs and franchise-level financial strain.
For workers and customers at these 59 locations, the practical reality is simple: the stores are still open, the court filing is already in motion, and the business that employs close to 1,000 people is now operating under bankruptcy protection while the cost dispute plays out.
