Iconic burger chain Carl’s Jr. is under increasing financial pressure from both California’s cost of doing business, $20 minimum wage rules and public safety issues that employees allege are spilling into the workplace.
Carl’s Jr. has 588 units in California as of 2025, but that number declined by 4% from 2023, when it had 613 units in the state, according to internal franchise documents. Last month, a major franchisee filed for bankruptcy, affecting 11% of operations across the state.
The doomed franchisee, Friendly Franchisees Corporation, last month explicitly blamed the state’s relatively new $20 minimum fast-food wage touted by the state’s Democratic leadership.
The wage increase, implemented in 2024, “materially increased operating expenses,” said CEO and founder Harshad Dharod.
Despite generating what it described as “substantial revenue,” the business struggled to stay profitable. The first three months reported $19.9 million in net sales, averaging between $6 million and $7 million per month, but there was also a $2 million net loss during that period.
Some blame was also put on corporate leadership’s ability to adapt and innovate to the market.
The economic headwinds have only been intensified by recent strikes over the past months by Carl’s Jr. employees.
Just last week, the California Fast Food Workers Union announced a strike “due to unsafe working conditions, wage theft, and understaffing.”
The union alleged understaffing and lack of proper supplies. One of the biggest standout concerns has been the anti-social behavior from some of the the company’s California customers.
“Nearly every day we’re subjected to aggressive and violent behavior by angry customers who yell at us and throw food at us, and we have experienced several violent attacks and robberies over the past year that have left us injured and in constant fear,” the union said.
Such incidents include a man threatening to hit an employee with a frying basket and then punching her in the face. Another alleged event occurred when someone stole cash right out of a worker’s hand.
“We live in fear just walking to work from the parking lot,” the union said.
The California Post reached out to Carl’s Jr. for comment.
The economic and unsafe working conditions are all converging to put major pressure on the chain, observers said.
“California’s war on basic economics continues to rack up losses,” said Jonathan Turley, a legal scholar and columnist at George Washington University.
