Major Hardee franchisee files for bankruptcy after closing 39 of 108 stores in eight states
Hardee’s franchise files for bankruptcy after closing 39 of 108 stores in eight states – as company blames rising food and labor costs for falling profits
- A major Hardee franchisee has filed for Chapter 11 bankruptcy
- More than 100 Summit Restaurant Holdings stores are at risk of closing
- Several other fast food chains are struggling to stay afloat amid a bleak economic outlook
A major Hardees franchisee has filed for bankruptcy after 39 of its 108 restaurants across America were forced to close.
Amid rising food and labor costs and a pandemic-fuelled loss of foot traffic, a fleet of Hardees restaurants owned by Summit Restaurant Holdings could close amid plummeting business results.
At its peak, the company controlled 145 Hardees locations across the country, but it has joined a growing number of companies going through turbulent financial times.
Summit, which is owned by fast food franchise Carls Jr. parent company CKE Restaurants, is now looking for a buyer to try to keep the remaining 108 restaurants afloat.
Affected locations are across America, with Summit’s Hardees stores in Alabama, Florida, Georgia, South Carolina, Kansas, Missouri, Wyoming and Montana.
Summit Restaurant Holdings, which owns more than 100 Hardee’s stores nationwide, pointed to rising transportation, food and labor costs before its demise
Facing a bleak economic outlook, the Hardee’s franchisee has already closed 39 of its restaurants as a desperate cost-cutting measure.
The move failed to save the doomed locations, however, and Summit filed for Chapter 11 bankruptcy last week.
According to documents filed with the Colorado Bankruptcy Court, the company has assets in the region of $1 million and $10 million, and debts between $10 million and $50 million.
The company reportedly blamed rising transportation, food and labor costs for its demise, in addition to rising rents for its numerous stores.
According to the website, Hardee’s owns 1,664 locations across America, and those not owned by Summit are not affected by the bankruptcy filing.
The company will reportedly use the bankruptcy period to find a new buyer and insists that the remaining stores remain open “as usual”.
In a statement following the bankruptcy filing, CKE Restaurants told DailyMail.com, “(The) goal is to maintain the maximum number of stores supported by a capital structure that is sustainable and poised for long-term growth and success. and we are working with all parties to achieve that goal.
Hardee’s focuses on its core customer and the products they are looking for, while also investing in restaurant physical infrastructure to grow traffic and sales.
Hardee’s is strengthening the brand position, supporting GMs and crews by streamlining menus, digital marketing and improving the financial health of our operators.
“Fiscal Year 2024 remains on track with an exciting growth opportunity.”
CKE Restaurant Holdings said it is devising a strategy for a return to “long-term growth and success.” Pictured: Ned Lyerly, CEO of CKE Restaurant Holdings
The locations in struggling Hardee aren’t the only ones in decline, with several other major fast food brands also introducing ominous cost-cutting measures.
Last year, Subway reported closing more than 500 locations, leading the longtime owners to explore a $10 billion historic sale.
And this month, rival chain Burger King estimated it will close up to 400 stores by the end of the year after two of its franchisees went bankrupt.
Numerous fast food brands, including Hardees, Wendy’s and Carl Jrs, are also rolling out an AI-like chatbot to take orders at the drive-thrus to try and keep up with their high-profit rivals.