A lender dispute over millions of dollars has led a Hardee’s restaurant franchisee to file for bankruptcy to invoke an automatic stay of all legal actions against the debtor.
Hardee’s restaurant franchisee Superior Star LLC filed for Chapter 11 bankruptcy protection, facing an alleged seller financing dispute, according to court papers.
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Hardee’s franchisee files for bankruptcy
The Phoenix-based franchisee filed its petition in the U.S. Bankruptcy Court for the Western District of Kentucky on July 9, listing $10 million to $50 million in assets and liabilities, according to PacerMonitor.
The debtor’s largest creditors include Starcorp LLC, owed $7.04 million in a disputed seller note subject to setoff; Lionsgate Investment, owed over $184,000 in terminated leases; Kosmides Family Trust, owed over $147,000 in a settlement; FJ Enterprises LLC, owed over $144,000 in a settlement agreement; McLane Company Inc., owed over $138,000 for food products; and MB2K LLC, owed over $123,000 in rent, according to court papers.
Superior Star, which purchased 93 Hardee’s locations in 10 states from Starcorp in 2023, currently operates 59 locations in Midwestern states. The company closed about 12 locations in 2025, according to Nation’s Restaurant News.
The debtor and Starcorp are entangled in a financing dispute over a $7.04 million seller note.
“We are aware that Hardee’s franchisee Superior Star, which independently owns and operates certain Hardee’s restaurants primarily in the Midwest region, has filed a voluntary petition for relief under Chapter 11 of the U.S. bankruptcy code,” franchisor Hardee’s said in a statement.
Hardee’s comment on dispute
“Superior Star’s decision to file is based on its own specific financial and business circumstances. We remain focused on continuing to strengthen the Hardee’s system and deliver quality experiences for our guests,” Hardee’s said.
Burger chain franchisor CKE Restaurants Holdings, which franchises Hardee’s and Carl’s Jr restaurants, has been in a battle with some of its franchisees as it tries to collect revenue, such as franchise fees, digital fees, advertising fees, and rent.
One such dispute led a franchisee to file for Chapter 7 bankruptcy liquidation.
CKE affiliate Hardee’s Restaurants LLC sued franchisee ARC Burger LLC for alleged breach of contract, seeking to recover over $6.5 million in unpaid franchise fees and other obligations, according to Law.com.
ARC Burger LLC, closed all 77 of its locations after Hardee’s Restaurants LLC filed a lawsuit against the franchisee in November 2025, for alleged failure to pay franchise fees and other obligations.
ARC filed Chapter 7 bankruptcy
The franchisee subsequently filed for Chapter 7 bankruptcy liquidation on April 20, 2026, which invoked an automatic stay while its bankruptcy case proceeded.
Hardee’s, however, reopened 25 of the ARC locations as company-operated stores and plans to reopen more, according to Nation’s Restaurant News.
Another Hardee’s franchisee, Paradigm Investment Group, battled franchisor CKE Restaurants Holdings over the parent’s demands that the franchisee’s restaurants stay open past 2 p.m., pay digital fees, and adhere to loyalty program mandates.
CKE Restaurants indicated that it would terminate Paradigm’s franchise agreements if the franchisee — which operated 76 Hardee’s restaurants in Alabama, Florida, Mississippi, and Tennessee — did not make the changes and payments. The franchisee refused, and CKE on Jan. 15, 2025, sent Paradigm a notice of default and termination, threatening to cancel the franchise agreements on April 15, 2025.
CKE Restaurants operates over 3,800 Hardee’s and Carl’s Jr. restaurants across 44 states and 43 countries.
Superior Star location territories
- Iowa
- Illinois
- Indiana
- Kentucky
- Minnesota
- Missouri
- North Dakota
- Ohio
- South Dakota
- Tennessee
- Source: Nation’s Restaurant News
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