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hardy’sLong-established American fast-food chain known for its Coal Burger and Breakfast Biscuits, has quietly closed several restaurant locations across the US due to the ongoing legal and financial turmoil affecting its franchise network.
Two Hardee’s, in Billings, Montana restaurant2404 Central Avenue and 608 N. 27th Street recently closed, with the doors scheduled to close permanently on Saturday, American Sun Report.
These locations were operated by ARC Burgers, Hardee’s largest franchisee, which is now embroiled in a controversy. trial The filing by the chain alleges non-payment of royalties, marketing fees and rent totaling approximately $6.5 million.
ARC Burger owns about 80 Hardee’s outlets, with reports indicating that 28 of those units are embroiled in the dispute. The company purchased the restaurants two years ago after the previous owner, Summit Restaurant Holdings, went bankrupt.
The closure is part of a broader reduction in Hardee’s footprint in recent months. At least 15 additional stores have closed since the beginning of October in states including Minnesota, South Dakota, North Dakota, Illinois and Iowa.
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Some Georgia locations have also recently abruptly ceased operations amid ongoing franchise disagreements.
Hardee’s operates more than 1,800 locations in the US, but the average restaurant makes less than $1.2 million annually, far less than Wendy’s $2 million and McDonald’s $3.9 million. 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 franchise bankruptcy, have been widely reported, Hardee’s challenges have largely flown under the radar.
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In another legal dispute, Paradigm Investment Group, a longtime Hardee’s franchisee that operates 76 restaurants in Alabama, Florida, Mississippi and Tennessee, is suing the company.
Franchisees allege that Hardee’s threatened to terminate their agreement over disagreements regarding digital services, technology fees and operational requirements, including Paradigm’s refusal to keep restaurants open after 2 p.m.
Paradigm says these demands were not part of its original contracts and could have caused serious harm to its business. In return, Hardee’s is seeking to enforce compliance and move forward with terminating the agreements.
If the company is successful in terminating the franchise agreements, Paradigm-owned Hardee’s locations may close.