Sun Gir Inc., a major franchisee operating Carl's Jr. restaurants, filed for Chapter 11 bankruptcy protection along with five affiliated companies. The bankruptcy filing potentially affects nearly 50 Carl's Jr. locations across California.

The franchisee cited California's $20 minimum wage as a contributing factor to the financial difficulties that led to the bankruptcy filing. California implemented the higher minimum wage for fast-food workers as part of recent labor legislation.

Chapter 11 bankruptcy allows companies to reorganize their debts and operations while continuing to operate under court protection. The filing does not automatically mean the restaurants will close permanently, though restructuring often involves location closures or operational changes.

The bankruptcy represents a significant portion of Carl's Jr.'s California footprint and highlights ongoing challenges facing restaurant operators as they adapt to higher labor costs. The fast-food industry has been particularly affected by minimum wage increases, with operators reassessing their business models and operational strategies.

Sun Gir Inc. operates as one of the larger franchisees in the Carl's Jr. system. The outcome of the bankruptcy proceedings will determine the future of the affected locations and their employees.