Another big Hardee’s franchisee declares bankruptcy
Hardee's franchisee files for Chapter 11 amid disputes over seller financing.
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Superior Star LLC, a Hardee's franchisee operating 59 locations in the Midwest, has filed for Chapter 11 bankruptcy. The operator had previously owned 93 restaurants across multiple states and is facing liabilities related to a disputed seller note worth $7 million from a recent acquisition.
Why It Matters
This bankruptcy may compress available territories for other franchisees in the Midwest and indicates potential financial instability within the Hardee's system.
Superior Star LLC, a prominent Hardee’s franchisee operating 59 locations across the Midwest, has filed for Chapter 11 bankruptcy. This move follows a year marked by significant closures, with at least 12 of its restaurants shutting down. At its peak, Superior Star operated 93 locations in states including Iowa, Illinois, and Ohio. The company’s bankruptcy petition reveals assets and liabilities ranging from $10 million to $50 million, which includes a disputed $7 million seller note concerning the 2023 acquisition of the locations from Starcorp LLC, a Nevada-based company.
The bankruptcy appears rooted in a disagreement over seller financing, as Superior Star claims it may have additional claims against Starcorp, which had a troubled financial background highlighted by a landlord lawsuit asserting that the franchise's financial difficulties were concealed during the sale. Superior Star’s filings also include settlements totaling over $900,000 with various real estate investors, further stressing its financial situation.
Hardee’s, which is part of CKE Restaurants owned by Roark Capital, stated that it is aware of the filing and that it reflects "specific financial and business circumstances" involving Superior Star. The franchisor emphasized its focus on strengthening the Hardee’s system and ensuring quality experiences for customers despite the challenges faced by its franchisee. This bankruptcy is part of a broader trend impacting franchisee stability within the Hardee’s network, evidenced by a previous bankruptcy filing by another large operator, Summit Restaurant Holdings, earlier in 2023.
