Restaurant operators across the U.S. are still dealing with higher costs in 2026, especially in labor and food. In California, that pressure has now hit Sun Gir Incorporated, the largest Carl’s Jr. franchisee, which filed for Chapter 11 bankruptcy and outlined plans to close and sell off dozens of stores.
Sun Gir’s bankruptcy plan includes 59 Carl’s Jr. restaurants
Sun Gir Incorporated operates 59 Carl’s Jr. restaurants, according to the bankruptcy-related reporting referenced by NewsBreak. In April 2026, the company filed for Chapter 11 bankruptcy protection as part of a restructuring effort tied to its restaurant portfolio.
As part of that plan, Sun Gir said it intends to close 10 underperforming restaurants and sell 49 additional locations. Company officials said in the reporting that the move is meant to reduce debt and improve long-term financial stability.
The filing affects the franchise operator, not Carl’s Jr.’s parent company. The Carl’s Jr. brand continues to operate thousands of restaurants worldwide through a mix of company-owned and franchised locations, according to the source material.
California is the center of the planned closures and sale process
The 49 restaurants slated for sale are in California, where Sun Gir operates most of its 59 Carl’s Jr. locations, according to the source material. That makes California the main state affected by the bankruptcy restructuring now moving through court.
What is confirmed is the scale of the plan: 10 closures and 49 sales tied to the April 2026 Chapter 11 filing. What is not yet known is which specific California restaurants will close, because the company has not released a comprehensive list of affected locations.
For now, the source material says the restaurants are expected to remain open during the bankruptcy process unless closure plans are announced for individual stores. That means customers may not see immediate changes at many California Carl’s Jr. locations in the near term.
Rising labor costs and inflation are driving the restructuring
In bankruptcy documents, Sun Gir cited rising labor costs, inflation, and ongoing financial losses as key reasons for the filing, according to the reporting. Those pressures have hit restaurant operators across the country in 2026, but the impact is especially relevant in California, where operating costs have climbed.
The source material also notes that California restaurant operators have faced higher wages and broader increases in day-to-day expenses in recent years. Those combined costs have pushed some franchisees and chains to reduce store counts or seek financial restructuring.
For customers, the immediate takeaway is limited but clear: many Sun Gir-run Carl’s Jr. restaurants are expected to keep operating while the case proceeds. Over the coming months, some California locations could be sold to new owners or permanently closed, depending on how the bankruptcy process unfolds in court.
