CKE Restaurants

From the pages of Restaurant Franchising
Hardee’s and Carl’s Jr. Target Top-Line Sales and Bottom-Line Profits

For more than a decade, CKE Restaurants’ brands Hardee’s and Carl’s Jr. have posted solid average unit volume (AUV) increases, overall a 50 percent increase in blended AUV for the decade. Impressive growth, considering the challenges to business in the recent economy.

“That speaks highly for the company and the performance of both brands,” says Ned Lyerly, executive vice president of global franchise development at CKE. “It’s a good time to invest with CKE. The company, led by the same executive team for more than a decade, operates with the philosophy of focusing on our franchisees and what is best for them.

“We are 28.5 percent company-owned, so franchisees can rest assured that any programs, new products, or systems we introduce are targeted to yield top line sales with a focus on bottom line profitability.”

CKE integrates its franchisees into the system by putting two franchisees, one from each brand, onto its board of directors. “They are privy to all the decisions made by the company and strongly represent the franchisee perspective,” Lyerly says.

The company works closely with the independent franchise associations of each brand, which represent the voice of the franchise community and contribute ideas to brand development. One example of a franchisee contribution is the hand-breaded chicken tenders, one of the most successful product launches ever, responsible for driving solid, same-store sales growth.

“We were reluctant, at first, to consider hand-battered chicken, but the franchisee was focused on its success and worked with our product development, operations, and marketing departments to demonstrate that it could be done. Now it’s a key driver to a strong year at both brands,” Lyerly says.

“With CKE, your destiny is as big or as small as you want it to be.” —Ned Lyerly, EVP, Global Franchise Development

Franchisee support includes 12 weeks of managerial training for new franchisees, sending an “all-star” training team to open the first restaurant of any new developer, and ongoing, online training for restaurant crews, which lets franchisees track each crewmember’s performance. Star Academy trains owners on the best ways to affect and evaluate the business as they visit their restaurants.

The two brands have regional focus, with Carl’s recognized on the west coast and Hardee’s on the east coast and in the Midwest. Both brands are poised for growth, and “the philosophy for both companies is to serve best-in-class product offerings, such as our 100 percent Black Angus beef Six Dollar Burger at Carl’s Jr. and the ThickBurger line at Hardee’s,” Lyerly says. “We offer sit-down-restaurant-quality food in a fast food environment.”

Other innovative CKE sandwich offerings include a portobello mushroom burger with a balsamic glaze, a turkey burger, and a grilled teriyaki chicken sandwich with grilled pineapple.

A draw to potential investors is the strong, multiple daypart menu at both brands. “Breakfast is bigger at Hardee’s, and we are now introducing made-from-scratch biscuits at Carl’s Jr. to build sales,” Lyerly says.

“We are also excited about our co-brand development initiatives. Green Burrito is offered as a co-brand opportunity at Carl’s and Red Burrito will be offered to Hardee’s franchisees. We are able to serve premium quality Mexican food within the four walls of existing restaurants, with very little retrofitting. This initiative will bolster lunch and dinner dayparts at both brands. It’s a cost-effective way to expand our reach,” Lyerly says.

Tremendous growth potential exists at both brands, with the company operating at approximately 40 percent of capacity in the U.S., according to Lyerly. Both Hardee’s and Carl’s Jr. brands have room to grow in core territories, as well as into new markets, and investors can sign on for single-store deals or exclusive multi-store development territories. The largest franchisee in the system operates more than 300 units.

“With CKE, your destiny is as big or as small as you want it to be,” Lyerly says.

For more information about franchising opportunities with CKE Restaurants, visit www.ckefranchise.com.