Hardee’s, the long‑established American fast‑food chain known for its charbroiled burgers and breakfast biscuits, has quietly shuttered several restaurant locations across the U.S. as part of ongoing legal and financial turmoil affecting its franchise network.
In Billings, Montana, two Hardee’s restaurants, at 2404 Central Avenue and 608 N. 27th Street, have recently closed, with the latter scheduled to shut its doors permanently Saturday, The U.S. Sun reports.
These locations were operated by ARC Burger, the largest Hardee’s franchisee, which is now embroiled in a lawsuit filed by the chain alleging unpaid royalties, marketing fees and rent totaling approximately $6.5 million.
ARC Burger owns around 80 Hardee’s outlets, with reports indicating that 28 of those units are tied up in the dispute. The company bought the restaurants two years ago after the previous owner, Summit Restaurant Holdings, went bankrupt.
The closures are part of a broader reduction in Hardee’s footprint in recent months. At least 15 additional stores have closed since early October in states including Minnesota, South Dakota, North Dakota, Illinois and Iowa.
Some Georgia locations also recently ceased operations abruptly amid the ongoing franchisee disagreement.
Hardee’s operates over 1,800 locations in the U.S., but the average restaurant earns under $1.2 million annually, far below Wendy’s $2 million and McDonald’s $3.9 million, according to Restaurant Business Online.
Both Hardee’s and competitor Burger King have faced declining profit margins due to intense competition, price wars, changing consumer preferences for healthier options and rising costs.
While Burger King’s struggles, including franchisee bankruptcies, have been widely reported, Hardee’s challenges have largely flown under the radar.
In another legal dispute, Paradigm Investment Group, a longtime Hardee’s franchisee operating 76 restaurants across Alabama, Florida, Mississippi, and Tennessee, is suing the company.
The franchisee alleges that Hardee’s threatened to terminate its agreements over disagreements regarding operational requirements, including digital services, technology fees and Paradigm's refusal to keep restaurants open past 2 p.m.
Paradigm says these demands were not part of its original contracts and could seriously harm its business. Hardee’s, in turn, is seeking to enforce compliance and move forward with terminating the agreements.
The Paradigm-owned Hardee’s locations could be shut down if the company succeeds in terminating the franchise agreements.
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