In the Cloud Radio Access Network (C-RAN) architecture, a Control Unit (CU) implements the baseband processing functionalities of a cluster of Base Stations (BSs), which are connected to it through a fronthaul network. This architecture enables centralized processing at the CU, and hence the implementation of enhanced interference mitigation strategies, but it also entails an increased decoding latency due to the transport on the fronthaul network. The fronthaul latency may offset the benefits of centralized processing when considering the performance of protocols at layer 2 and above. This letter studies the impact of fronthaul latency on the performance of standard Automatic Retransmission reQuest (ARQ) protocols, namely Stop and Wait, Go-Back-N and Selective Repeat. The performance of the C-RAN architecture in terms of throughput and efficiency is compared to the that of a conventional cellular system with local processing, as well as with that of a proposed hybrid C-RAN system in which BSs can perform decoding. The dynamics of the system are modeled as a multi-dimensional Markov process that includes sub-chains to capture the temporal correlation of interference and channel gains. Numerical results yield insights into the impact of system parameters such as fronthaul latency and signal-to-interference ratio on different ARQ protocols.