COVINGTON, Ga. – Covington residents abruptly had one less fast food establishment to choose from this December when the Hardee’s on Highway 278 closed its doors. But, as it turns out, the Covington location was one of dozens across Georgia and the nation went dark seemingly without warning.

A note posted on the Covington restaurant’s front door indicated that the location would be “closed until further notice.”

“Thank you for being loyal guests and for allowing us to be part of this community,” the note read. “Unfortunately, this location has been closed and will remain closed until further notice. We appreciate your patronage over the years.”

This closure – as well as others across the country – stems from a dispute between Hardee’s Restaurants and ARC Burger.

ARC Burger is the franchisee that has run and operated 77 Hardee’s locations across the United States since August 2023, including the one in Covington until its Dec. 20, 2025 closure. Its parent company is High Bluff Capital Partners, which has affiliations with other chain restaurants such as Church’s Chicken and Quiznos.

In a 20-page lawsuit filed in the U.S. Middle District of Tennessee, Hardee’s claims that ARC owes the fast-food giant $6.5 million in unpaid fees, royalties and rent payments. Specifically, Hardee’s alleges that ARC stopped making payments in December 2024 and eventually went into default.

Hardee’s issued a termination notice on Sept. 11, 2025, but agreed to allow ARC to continue operating the restaurants due to both parties’ “shared interest” in finding a suitable buyer, according to court documents. 

But that agreement fell through, leading to abrupt closures of numerous Hardee’s restaurants.

“HR’s [Hardee’s Restaurants] agreement to allow ARC to operate post-termination was expressly conditioned on ARC’s remaining current on its ongoing payment and other obligations to HR,” per pages 2-3 of the 20-page filing. “ARC has failed and refused to remain current on its ongoing payment and other obligations to HR, despite all signs showing that ARC is profitably running the restaurants.

“Wherever ARC’s profits are going, they are not being applied to past-due or ongoing fees owed to.”

In a statement to The Covington News, Hardee’s reaffirmed that the recent closure of the Covington location was due to the ongoing alleged financial issues of ARC.

“We can confirm that ARC Burger, a franchisee that independently owns and operates Hardee’s locations in several markets, has closed its location at 3112 Hwy 278 NE in Covington, GA,” a spokesperson for Hardee’s Restaurants wrote. “This and other closures are the result of ARC Burger’s failure to cure its defaults under its franchise agreements, despite solid sales and our continued attempts over the course of many months to reach a resolution that would keep these restaurants open.”

Despite the closure, Hardee’s says it is hoping that this will only be temporary.

“We understand the impact of closures on restaurant employees and local communities, and we are working hard to find a path forward to reopen closed locations,” the spokesperson wrote. “We remain focused on ensuring long-term stability and growth for the Hardee’s brand.”

ARC and High Bluff Capital did not respond to a request for comment by the press deadline.

Hardee’s has a rich history in Covington dating back long before ARC became involved.

The first restaurant opened during the 1970s at the intersection of Industrial Blvd and Highway 278, where Mamie’s Kitchen is currently located. Hardee’s then opened at its current location from 1983 until the mid-2000s.

Popeyes Louisiana Kitchen moved into the building before shutting down in mid-2010 due to lingering effects of the 2008 recession.

In 2012, Hardee’s returned to the Covington community, resuming its location on the corner of Highway 278, where it has remained in operation until this past December.