Sun Gir Incorporated, a lead debtor in Chapter 11 cases filed in early April, has requested court permission to reject leases for at least three Carl's Jr. locations in the Los Angeles area. The restaurants were still operating as of this week, but they have generated substantial negative cash flow for the franchisee. Sun Gir states that the locations are burdensome and impose financial losses without sufficient economic benefit. The filings do not explicitly state that the restaurants will close, though lease rejection typically leads to closure. Sun Gir also hired National Franchise Sales to help sell some Carl's Jr. locations, with bids expected in July and a potential auction in August. The company and affiliates own 59 restaurants in California and employ about 1,000 people, but the number of job losses remains unclear.
"In a separate filing, Sun Gir said that it has hired National Franchise Sales (NFS), a business brokerage firm, to help it sell some of its Carl's Jr. locations, but it did not specify which ones. The details of that process are still being worked out, with bids expected to be due in July and an auction potentially scheduled for August."
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