The dream of a classic burger joint Down Under has hit a snag as the burger chain Carl’s Jr has entered voluntary administration in Australia.

The chain, which once had plans to open a whopping 300 stores across the nation, has now left hundreds of employees facing uncertainty.

Carl’s Jr, which began in the United States and is known for its charbroiled burgers and indulgent menu, has become a casualty in the fast-food industry, with 24 stores affected by the administration.

KPMG, stepping in to manage the crisis, appointed David Hardy, George Georges, and Emily Seeckts as administrators to oversee the process.

Burger chain Carl’s Jr entered into voluntary administration. Credit: @carlsjrau / Instagram

The impact of this decision is far-reaching, with the majority of the Australian franchise located in regional areas of New South Wales, Queensland, and Victoria.

The CJ’s Group, which independently owns and operates 24 restaurants, is also the master licensee for an additional 25 locations run by third-party sub-licensees.

David Hardy from KPMG Australia’s restructuring services has stated that their initial efforts will be to ‘stabilise' the group’s operations.

‘We will be conducting an immediate sale process of the existing store network and operations,’ he said.

‘We will be working with all stakeholders, including employees, suppliers and landlords, to maximise the outcome for all parties.’

Stakeholders are expected to be contacted within days, and a creditors meeting has been scheduled for 7 August.

The future of the stores hangs in the balance, with only four expected to remain open under the CJ’s Group, while 20 will face immediate closure.

However, there is a silver lining for some, as the appointment of administrators does not include the 25 restaurants independently owned and operated by third-party sub-licensees.

These restaurants will transition to a direct licensed relationship with CKE Restaurants Holdings, Inc. (CKE) and are expected to experience minimal change.

The administration of Carl’s Jr's Australian stores is a standalone issue and will not affect the chain's locations overseas.

Carl’s Jr has a global presence in more than 30 countries, continuing to serve up its signature burgers elsewhere.

The chain's foray into the Australian market began in 2016, with the first store opening in Bateau Bay on the NSW Central Coast.

Positioned as a higher-end fast-food restaurant, Carl’s Jr's pricing was steeper compared to its competitors.

Unfortunately, the brand couldn't withstand the downturn in spending on take-out food, which has been exacerbated by the rising cost-of-living crisis.

Key Takeaways

• US burger chain Carl's Jr. has entered voluntary administration in Australia, affecting 24 owned stores and hundreds of employees.
• Operational stabilisation is the immediate focus of KPMG's appointed administrators, who are also conducting a sale process of the store network.
• Stakeholders, including employees, suppliers, and landlords, are to be involved in maximising outcomes with a creditors meeting scheduled for 7 August.
• While 20 stores will close immediately under the CJ's Group, the administration will not affect the independently operated stores under third-party sub-licensees, which will transition to a direct licensed relationship with CKE Restaurants Holdings, Inc.

Have you been affected by the Carl’s Jr closures? Do you have fond memories of dining at their restaurants? Let us know in the comments below!

 

[robertmcglew]

High prices, small size of finished products. Little wonder there is closure. Franchisees will have a hard run unless they upgrade their sizing and prices. We are living in hard times, work it out. RobMac

 

[BeautifulMousey]

Never heard of them

 

[Veggiepatch]

Carl's Jnr promotes heavily on Major League Baseball, competing with Jack in the Box, so when Carl's Jnr opened in SA with heavy discounts,

What has Major League Baseball got to do with a hamburger chain operating in Australia?

They all cook their stuff in canola oil which is poison. All seed oils are bad for. your health if you use them regularly.

Care to list the poisons contained in canola oil? Would you prefer your food cooked in Valvoline 15W/40? Canola oil was developed to eliminate toxics from certain species of the rapeseed plant, namely erucic acid and glucosinolates. Another benefit of "genetically modified" canola oil is that has a much greater resistance to vermin, thereby reducing the need for pesticides. Hope that makes you happy!

People have been conditioned to equate genetic modification of foodstuffs to nasty, toxic and "no good for you", without any verifiable evidence. Such scaremongering originates from "wellness" and "alternative" medicine websites who have little or no knowledge of toxicology or nutritional medicine. Blame good old social media for this explosion of misinformation.

 

[Kevin. A.]

It is sad to see any business go under. All of the store employees (their families) now not knowing what to do. These people rely on employment to support their families, mortgages, food, phone, electricity, gas and pay the bill and they are now facing an unknown future. I worked for a firm in Sydney, and the company waited until we had all came back off our annual leave after Christmas to tell us they were closing down the factory. All of the people who had families and had outlaid money for Christmas that had they known the company were closing their doors they may not have spent as much money. To then be told we were all out of a job without prior warning. The company had outlaid literally (I am not joking) millions of dollars putting in new state of the art machines and equipment. We all assumed (silly us) If the company was spending that sort of money on the plant, then our jobs were safe. As soon as we got back, there was a big staff meeting and that was it. Our government of the day had given this overseas company subsidies to operate the plant for three years (we made Tyre fabric, whipper cord and fishing line). Three years to the day the company closed the factory doors. The company had built a plant in South Korea which operated using robots, twenty-four hours a day, seven days a week, 52 weeks of the year, and with only a hand full of human technicians, to ensure the robots kept running. The reason for closing the Sydney plant was that the new plant in South Korea could output in one week what we were producing in a month. How can you compete against this sort of AI technology. Scary to think of what the future of jobs will be like. Some governments are playing around with something called the "Universal income". Where everyone is given a universal wage, regardless of whether you work or not. The idea is governments will tax industries that employ robots, and those taxes will support the people. Scary.

 

[Bellclare]

Maybe they went where the rents/building purchases were cheap instead of inner city suburbs.

 

[Sue neal]

I live in Adelaide and the one in my suburb hasn’t been there very long. I remember when it was being built. I’ll have to give it a go in case anything happens to it.