Bankruptcy crisis at giant fast food chain with branches in Turkey

Sun Gir, known as one of the largest franchise operators in the US for the globally active Carl’s Jr. brand, which also has restaurants in Turkey, has filed for bankruptcy protection in court after failing to overcome economic difficulties. The company announced that it has initiated the process to divest 49 of its 65 branches.

It was stated that the new minimum wage regulation introduced for the fast food sector in California was effective in the underlying financial bottleneck. Company executives stated that the minimum wage, which rose to 20 dollars for fast food workers in California, significantly increased operating costs.

"The 20-dollar minimum wage regulation for fast food workers in California, along with rising labor and operating costs, has made operations unsustainable," it was stated.

Following this decision, Sun Gir moved to put a large portion of its restaurant chain up for sale. The process is expected to result in the takeover by experienced investors and other franchise owners.

Following the developments in America, Carl's Jr.'s main management also made a statement on the matter. In the announcement made by the central management, it was emphasized that the events do not threaten the general structure of the brand and that operations are continuing. Sun Gir's failure to fulfill its obligations was evaluated as a breach of the franchise agreement, and it was stated:

"Sun Gir's bankruptcy is not a structural problem that will affect the entire chain. The disruptions the company experienced in rent, royalties, and other payments constitute a violation of franchise agreements."

Carl’s Jr., which continues to serve with 24 branches in Turkey, announced that the developments in the US have no impact on its international operations.