The California-born fast-food chain crushed by costs, crime and competition

Carl’s Jr. started in 1941 as a sizzling canine cart on the corner of Florence and Central in Los Angeles and grew into one of many area’s best-known burger chains. Eight many years later, the now-global chain is struggling in its outdated neighborhood.

The excessive prices of doing enterprise in California, festive labor points, fierce competition and crime have hit the chain laborious in Southern California. Its staff are strolling off the job in protest over working circumstances, and a prime franchisee within the space has filed for chapter safety.

“These guys were first at the party in Southern California,” mentioned Chris Rodriguez, co-founder of DealGround, an AI platform that tracks industrial actual property. “Now, it’s kind of like they’re swimming upstream in every lane.”

The franchisee who controls 59 Carl’s Jr. shops utilized for chapter safety final month, saying he could not pay his payments, blaming California’s $20 minimal wage and Carl’s Jr.’s lack of innovation.

The excessive prices of doing enterprise in California, festive labor points, fierce competition and crime have hit Carl’s Jr. laborious in Southern California. Above, in North Hollywood on April 21, 2026.

(Jason Armond/Los Angeles Times)

“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,” the franchisee, Harshad Dharod, mentioned in a submitting with a Central District chapter courtroom.

Some of the near 1,000 staff working for the franchisee say the chain’s efforts to chop prices to the bone have left them overworked, understaffed and uncovered to violence.

“It’s a problem from the top. They don’t want to spend,” mentioned Elizabeth Alvarado, a Carl’s Jr. employee in Northridge. “I need my job, and I do the best I can. But, I can only do so much.”

Carl’s Jr. blames the franchisee.

“This situation is specific to this individual franchisee’s financial and business circumstances,” a spokesperson for Carl’s Jr. and its guardian firm, CKE Restaurants, instructed the Los Angeles Times. “We remain committed to delivering quality experiences for our guests, while driving profitable, sustainable growth for our franchisees and brand.”

The franchisee’s shops, virtually all in Southern California, stay in operation as of mid-May.

Whether and how the chain can untangle itself from this knot of blame will decide whether or not it could actually rebound to its former glory in its birthplace as a flag bearer for California burger tradition or recede into irrelevance.

Carl’s Jr. opened its first sit-down eating places with expanded menus in Anaheim in 1946. Its smiling yellow star was born within the Fifties and quickly unfold throughout California all through the Nineteen Seventies. In the Nineties, it purchased Hardee’s, and now each chains are run with comparable menus and branding by CKE Restaurants.

Although it moved its headquarters from Carpinteria to Tennessee within the final 10 years, its menu nonetheless displays its California origins, with objects such because the Cali XL, a double cheeseburger. The chain was among the many first to identify the meat-free pattern and launched plant-based burgers and the charbroiled turkey burger. In the early 2000s, it made a splash with commercials pointing to its California origins.

The chain’s founder, Carl Karcher, turned considered one of California’s highest-profile enterprise leaders by showing within the firm’s commercials. He was additionally a conservative and religious Catholic who was a goal of ladies and homosexual rights activists riled by his opinions about homosexuality and abortion.

The chain drew later criticism for an advert that includes Paris Hilton in a bikini washing a Bentley earlier than taking a chew of a brand new spicy burger providing. The firm stood behind the advert and expanded its suggestive commercials, which later featured Kim Kardashian and Kate Upton.

A Carl’s Jr. supervisor receives a requirement letter from staff at a retailer in North Hollywood on May 8, 2026. Workers declare they’ve suffered labor violations, together with being denied breaks and paid sick depart.

(Myung J. Chun / Los Angeles Times)

Carl’s Jr. has been repeatedly sued over labor points and was fined by Los Angeles metropolis officers for wage theft in 2017. City officers discovered that the corporate did not pay the right minimal wage to greater than three dozen staff, and ordered Carl’s Jr. to pay $1.45 million.

Today, Carl’s Jr. has barely greater than 1,000 places within the US, with most of these in California. Hardee’s has greater than 1,800 places within the nation, in response to its web site.

Like most eating places, Carl’s Jr. has been struggling to draw prospects at a time when many are more and more involved about inflation and the well being of the financial system. Some chains are slashing costs to supply customers extra burger for his or her buck. Smaller chains cannot compete properly within the worth wars. Those with out a sturdy model id and fan base have been struggling.

Like most eating places, Carl’s Jr. has been struggling to draw prospects at a time when many are more and more involved about inflation and the well being of the financial system. Above, a buyer within the drive-through of a Carl’s Jr. in North Hollywood on April 21, 2026.

(Jason Armond/Los Angeles Times)

The financial pressure has rippled by means of legacy fast-food chains like by no means earlier than, mentioned Rodriguez, who expects some manufacturers will buckle underneath the stress.

Carl’s Jr.’s US community of eating places will shrank 3% in 2024, in response to the corporate’s franchise disclosure doc. The Hardee’s community shrank greater than 10% from the beginning of 2023 and the top of 2025. A serious Hardee’s franchise operator shuttered 77 places in December.

Franchisee Dharod instructed the chapter courtroom that enterprise had develop into significantly unhealthy within the final two years, leaving him with out sufficient money readily available to cowl wages, lease, provides and insurance coverage. Although its shops have generated greater than $6 million in month-to-month income, they’ve been shedding greater than $600,000 monthly this yr.

Without safety from the courtroom and the flexibility to make use of his day by day money stream to fulfill these wants, he might lose his staff and franchise rights, he mentioned.

“If payroll is not paid or vendors cease delivering goods, the debtors would be forced to shut down restaurant operations within a matter of days,” he mentioned within the courtroom doc.

Carl’s Jr. staff say they’re feeling the warmth and have staged a number of walkouts in latest months to convey consideration to their considerations. They are usually not getting the employees, provides, coaching or safety they want, mentioned Yadeli Caldera, a 22-year-old Carl’s Jr. employee.

She is usually the one individual working the in a single day shift in Chatsworth and usually encounters violent prospects. She lately feared for her life when a buyer was offended about an order.

“He started yelling in my face, hit his car horn and seemed like he was about to get out of his car to come towards me,” Caldera instructed The Times. “It’s scary, because if an emergency happens, what do I do? What if I’m already dying on the floor? I don’t have someone else with me. I’m alone.”

Members of Service Employees International Union Local 721 protest in assist of staff outdoors a Carl’s Jr. in North Hollywood on May 8, 2026.

(Myung J. Chun / Los Angeles Times)

Some staff say they now should do the work of a number of folks, which is resulting in on-the-job accidents.

Workers detailed violent interactions with prospects, together with robberies and bodily assaults, and mentioned the corporate didn’t present security coaching. Angry prospects throw drinks at staff, in response to complaints filed by staff to Cal/OSHA and the California Labor Commissioner’s Office.

Yolanda Cruz, who has labored at Carl’s Jr. for 20 years, says staff are often harassed by prospects. One morning, a person jumped at her as she tried to enter the restaurant.

“What else can we do? Just pray to God that how we get to work is the same way we return home at the end of the day,” Cruz instructed The Times in Spanish. “This is the fear we have all the time.”

Juana Rocha is nearly all the time the only real prepare dinner working throughout her night time shift. Her palms work towards the clock to handle the grill and fryer, wash dishes, mop the flooring, prep the salsa and guacamole, package deal the meals and bag the meals — a job that ought to be carried out by no less than three folks, she mentioned.

“They treat us like animals,” Rocha instructed The Times throughout a protest led by the state’s fast-food union. “We’re raising our voice because if we don’t make them hear us, this treatment will never end.”

The Carl’s Jr. spokesperson mentioned that the franchisee is liable for any cost-cutting and for managing staff who don’t work straight for the nationwide chain.

“Staffing decisions are made by the franchisee operator, so it is inaccurate to link the issues with Carls Jr., the corporation,” she mentioned.

The franchise operator who filed for chapter and runs the branches the place staff protested didn’t reply to requests for remark.

The firm has been making an attempt to construct buzz across the model this yr with a Super Bowl-connected burger giveaway. It returned to its roots with some racy commercials that includes social media star Alix Earle and a cameo from Paris Hilton.

CKE mentioned its western bacon hen sandwich has been fashionable, and a rising variety of potential prospects have been clicking on its content material.

“Carl’s Jr. continues to see positive momentum in marketing efforts that have engaged and attracted new guests,” the spokesperson mentioned.

A better minimal wage means the chain has to chop again on different prices or persuade prospects to pay extra, mentioned James Vitrano, a restaurant govt who leads efforts to stabilize struggling eating places for Dorset Partners.

“You’ve got some great burgers in LA,” he mentioned. “Nobody really knows where Carl’s Jr. stands anymore.”