A leading fast-food chain faces multiple problems.Low margins and poor sales may be its biggest problem.The chain’s franchise operators have struggled a,nd one filed for Chapter 11 bankruptcy.
Fast-food/quick-serve restaurants (QSR) operate in a brutally competitive market.
That’s something commercial real estate firm Matthews addressed in a deep dive into the the recent struggles of two major chains.
“QSRs operate in a highly competitive and cost-sensitive environment. Profit margins in the QSR industry typically range from three percent to nine percent of revenue, with most earnings derived from high sales volumes. However, achieving these margins requires maintaining operational efficiency, effective cost management, and continuous innovation to attract and retain customers,” Erik Vogelzang wrote for Matthews.
He sees Hardee’s and Burger King, two chains that have faced recent struggles, as facing problems on multiple fronts.
“Hardee’s and Burger King have faced significant challenges regarding declining profit margins. The intense competition within the QSR industry, saturated with numerous burger-focused chains, has led to price wars and reduced profitability,” he added.
Those aren’t the only issues dragging on the two chains.
“Additionally, changing consumer preferences and demands for healthier options have negatively impacted these brands, which have struggled to adapt their menus accordingly. Rising costs, including labor and ingredient expenses, have further strained profit margins,” he shared.
Hardee’s has struggled quietly
Burger King’s problems, including franchisee bankruptcies have been all over the news. Hardee’s struggles have been more under the radar.
See More:Burger King makes major move fans will love after franchise bankruptcies
“Hardee’s executives are asking a New York franchisee that owns 76 locations to either shape up or close down,” RetailWire reported.
The franchisee, Paradigm Investment Group, has filed a lawsuit against the parent company of the fast-food chain, claiming that the latter’s insistence that its eateries remain open past 2 p.m. could force them to close.
“The dispute centers on 76 Hardee’s restaurants in Alabama, Mississippi, Tennessee, and Florida, which would have to close if the company’s ‘franchise termination’ attempt is successful,” according to the website.
Paradigm said that is has spent more than $173 million on its restaurants and paid over $87 million in royalties. The franchisee said it’s facing termination for refusing to adopt digital services, such as online ordering, third-party delivery, and loyalty programs.
The parent company also wants the franchisee to operate during the hours stated in the franchise agreement, which includes opening at 6 a.m. and closing at 2 a.m.
“If Paradigm gave in to [Hardee’s] demands, the harm to Paradigm would be immeasurable,” the lawsuit says, Restaurant Business Online reported. “There would be no limit to the fees that HR (Hardee’s Restaurants) could subject Paradigm to, Paradigm would be abandoning its expressly granted menu-price control, and if store operating hours are imposed by HR, it would force Paradigm to ignore other system standards and destroy the unit economics of the restaurants where modified hours are critical.”
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Hardee’s was not willing to comment on the story, citing ongoing litigation.
These restaurants are at a risk of closure while the chain has actually closed other locations.
Hardee’s/Paradigm lawsuit docket.
A jury trial to decide the case is set for March 30, 2027.
Hardee’s has been closing down restaurants and faces a lawsuit that could close more.
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Hardee’s closures/at-risk locations in 2025
CKE (Hardee’s parent) is pushing to close 76 Hardee’s restaurants operated by franchisee Paradigm Investment Group. The dispute centers on Paradigm’s refusal to stay open past 2 p.m., digital fees, and loyalty program mandates.
Source: RetailWire
The 76 locations in question are in Alabama, Mississippi, Tennessee, and Florida.
Source: RetailWire
A large Hardee’s franchisee, Summit Restaurant Holdings, filed for Chapter 11 bankruptcy and closed 39 Hardee’s restaurants.
Source: Restaurant Business Online
In Fargo, two Hardee’s restaurants (in Fargo and West Fargo) are permanently closed as of November 2025.
Source: InForum
According to ChowHound, Hardee’s has closed “more than 200” locations over the past decade, citing franchisee distress and system-wide financial pressure.
Source: ChowHound
Most recent Hardee’s closures
The Hardee’s at 2301 Hamilton Blvd, Sioux City, IA is permanently closed.
Source: MapQuest
Another Hardee’s in the Sioux City metro area (near Southern Hills Mall) has shut permanently.
Source: Yahoo News
Minnesota at least 6 Hardee’s locations reported closed across the state in recent weeks).
Source: Yahoo
Fargo/West Fargo, ND (metro): Two Hardee’s restaurants reported permanently closed.
Source: InForum
Hardee’s has faced other issues
In addition to its franchise issues, Hardee’s has struggled in other ways.
“The most recent warning sign that Hardee’s is going downhill were protests that occurred at multiple restaurant locations in late 2024. Activists from The Humane League — a global nonprofit dedicated to ending abuse of animals raised for food production — staged demonstrations in October 2024 at Hardee’s restaurants and the CKE headquarters in Franklin, Tennessee,” The Takeout reported.
Hardee’s has also faced poor economics for its restaurants.
“The chain itself has struggled for years. A typical Hardee’s location generates less than $1.2 million per year, lower than any of its primary competitors. By comparison, Burger King does $1.6 million, Wendy’s $2.1 million and McDonald’s nearly $4 million. All four have similar business models, with all three dayparts and restaurants with drive-thrus,” Restaurant Business Online reported.
Those numbers have not been moving in the right direction.
“Hardee’s average unit volumes are lower than they were a decade ago. The chain has closed 200 U.S. locations over the past decade, including 150 over the past three years. The brand’s domestic system sales are down 12% since 2014, according to data from Restaurant Business sister company Technomic,” the website added.
