The Carl’s Jr. next to Montgomery Village in Santa Rosa is set to be turned over at the end of July, closing a 35-year run at 1000 Farmers Lane after the chain’s parent decided not to renew the lease. David Codding, who owns the parcel, said CKE elected not to exercise its last five-year option, leaving the property on track to revert to Lakeside Leasing Inc. when the current term expires.
The timing matters because the restaurant is not being pushed out by weak business. It is one of 10 California Carl’s Jr. sites under review in a Sun Gir bankruptcy case, and it sits among seven leases the franchisee wants to reject at a hearing set for July 1 in Santa Ana bankruptcy court. The lease would have run through 2031 if it had been renewed.
For Codding, the change ends a long chapter that started in 1984, when he bought the undeveloped two-thirds of an acre corner parcel, and continued in October 1990, when he signed the lease with Carl Karcher Enterprises Inc., now CKE Restaurants Holdings Inc. CKE later subleased the site to the Sun Gir group about 13 years ago. Lakeside Leasing is now seeking offers to buy the property, a sign that the site’s next life may arrive quickly after the restaurant is handed back.
The numbers make the decision harder to explain in simple business terms. The Farmers Lane location brought in $2.4 million from May 2024 through March of this year, the most revenue of the 10 sites under review, and it also posted the highest net income among the two operating in the group at $22,454. Even so, it remains on the list of leases marked for rejection.
Sun Gir filed for Chapter 11 reorganization on April 2 and hired National Franchise Sales to market 49 franchised locations as it tries to reshape its business. Harshad Dharod said the financial strain began about two years ago and was driven by higher labor costs after California’s $20-an-hour fast-food wage took effect, along with declining sales. The Santa Rosa shop is now on a short fuse: unless the bankruptcy court changes course on July 1, the lease is set to end and the keys are due back by the end of July.
