Hardee’s Franchisee Faces Closure Amid Lawsuit with Parent Company

HUNTSVILLE, Alabama — Hardee’s is facing a crisis as its franchisee, Paradigm Investment Group, is battling a lawsuit with the restaurant’s parent company, CKE. The dispute revolves around 76 franchise locations in Alabama, Mississippi, Tennessee, and Florida, which could be forced to close if the lawsuit does not resolve in Paradigm’s favor.

The franchisee claims that CKE’s insistence on keeping restaurants open until 2 a.m. could lead to financial ruin. Paradigm has invested more than $173 million in its Hardee’s locations and paid over $87 million in royalties, arguing that the demands from CKE could damage the profitability of its restaurants.

The lawsuit states, “If Paradigm gave in to [Hardee’s] demands, the harm to Paradigm would be immeasurable.” It further contends that franchise operating hours set by CKE would negate Paradigm’s operational control, leading to significant economic losses.

As part of the ongoing disputes, Hardee’s has already closed multiple locations across the country with more than 200 shuttered in the past decade. The franchisee’s situation reflects broader issues within the chain, which has struggled against rivals; Hardee’s locations earn less annually compared to competitors like Burger King and Wendy's.

With the possibility of a trial looming, both sides are at an impasse, and the future of Hardee’s in these regions hangs in the balance.