The Franchisee Failed. Hardee's Kept the Corner.

Hardee's cut off its 77-restaurant franchisee, ARC Burger, in December 2025. The stores closed that month, and ARC filed Chapter 7 in April. Per Restaurant Business, Hardee's terminated it over $6.5 million in unpaid royalties, marketing funds and rent. Within months the brand was reopening the same buildings as company restaurants.

Our position: a dark Hardee's is a verdict on an operator, not on a corner. The useful question is which boxes the brand took back and which it left dark. The second list is where the real estate is.

What happened

• Per Restaurant Business, ARC was formed in 2023 when the private-equity firm High Bluff Capital bought restaurants out of the bankrupt Summit Restaurant Holdings. Its stores were in Alabama, Florida, Georgia, Illinois, Kansas, Missouri, Montana, South Carolina and Wyoming.
• Per Restaurant Dive, the Chapter 7 petition listed assets between $500,000 and $1 million. Restaurant Business reports more than $29 million in estimated liabilities.
• Per The Post and Courier, the 77 restaurants did $92.2 million in sales in 2025, about $1.2 million a store. Hardee's said in a statement that the closures came "despite solid sales."
• Per Complex, citing a company statement to Fast Company, Hardee's had reopened 15 former ARC locations in Georgia, Missouri and South Carolina as corporate restaurants by April, with more than 40 others expected to follow.
• The Post and Courier reported six of ARC's eight South Carolina stores back open as corporate-run locations. Two were not.

Rent was part of the claim

Restaurant Business reports the $6.5 million claim included rent on 28 of the 77 locations. In our reading, Hardee's was the landlord on at least those 28. That changes the math. A franchisor that owns the dirt has every reason to reopen fast. The box earns nothing dark, and a company store keeps the corner off the market.

The same logic runs the other way. If the brand has not reopened a box it could have reopened, that tells you something about the site.

The system is still shrinking

None of this makes Hardee's a growth story. Nation's Restaurant News reported October 7 that the chain finished 2025 with under 1,500 locations, nearly 400 fewer than in 2017, and has closed more restaurants than it opened in each of the past eight years. Restaurant Business puts 2025 closures at 86, most of them ARC stores, with system sales down 5 percent. Restaurant Dive reported this month that Superior Star, a 60-unit Hardee's franchisee, filed Chapter 11 in July. CKE named Alisa Gmelich president of Hardee's on October 7.

So a reopened box is not a permanent hold. A company store run to protect a corner can still close at the next review.

What we watch for

• Boxes the brand did not reopen after it reopened the rest of that operator's market. Ten months on, those are second-generation drive-thru buildings with a known sales history and no brand plan for them.
• Who owns the fee. A franchisor-owned parcel is a different conversation from a box on a third-party lease, and a closure notice will not tell you which.
• Volume against the building. A drive-thru box doing about $1.2 million is a reuse candidate for a brand with higher volumes, not a teardown.
• The next franchisee filing. Summit, ARC and Superior Star have all filed since 2023. Each filing puts a batch of buildings in play at once, and the first question is the same every time: which ones does the brand want back.