The 177-unit franchise operation owned by the grandchildren of Carl’s Jr. founder Carl Karcher filed for Chapter 11 bankruptcy last month.
Frontier Star LLC and Frontier Star CJ LLC filed bankruptcy on July 27 in the U.S. Bankruptcy Court in Arizona. The two entities operate 177 Hardee’s and Carl’s Jr. units in Arizona, Texas, Illinois, Missouri, Kentucky and Tennessee, according to court filings. Each listed more than $10 million in debt.
Jason LeVecke, a grandson of Karcher, is CEO of both entities, based in Guadalupe, Ariz. Owners also include two of his siblings, Carl and Margaret LeVecke.
The largest creditor listed for both companies was franchisor CKE Restaurant Holdings Inc.
In a statement, officials with Carpinteria, Calif.-based franchisor CKE Restaurant Holdings Inc. said the restaurants will remain open for business during the proceedings.
“The problems at Frontier Star were the result of decisions made by, and circumstances unique to, that franchisee,” a spokeswoman said in a statement. “Our franchise system is otherwise very strong financially and continues to grow.”
Calls to Frontier Star and to an attorney listed on the filing were not returned by press time.
In 1941, Karcher launched what became the Carl’s Jr. chain with a hot dog stand in Los Angeles. In 1945, he went on to open Carl’s Drive-In Barbecue and began expanding, taking his company, Carl Karcher Enterprises, public in 1981, with 300 Carl’s Jr. locations.
CKE was taken private in 2010 and is now owned by Roark Capital Group.