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    For Carl's Jr. and Hardee's, It's Divide and Conquer

  • The two iconic brands are going solo in hopes of continued growth and differentiation.

    Web Exclusive April 18, 2018 By Bryan Reesman
    Carl's Jr.
    Carl’s Jr.'s New York City restaurant showcases the brand's unique place in quick service—the unit even serves wine and beer.

    Carl's Jr. and Hardee's have been united under the same umbrella since CKE Restaurants Holdings, Inc., parent company to the former, purchased the latter in 1997. For the last decade, the two brands have shared menu offerings, the same logo font and color scheme, smiling star icon, and sexually provocative TV spots. But CKE wants to grow each brand and distinguish them as separate entities, from advertising to food, and seek to entice new customers and remain relevant.

    “You're going to see continuous changes,” says Jeff Jenkins, chief marketing officer of CKE Restaurants, Inc. “We've got two brands that have been marketed together for the better part of a decade, and we're on the journey to separate and create those different, distinct brand identities. We’ll see completely different menus and completely different assets. We want to stand out [so] when you're driving down the road [we] capture your attention to tell you what we stand for. And I think by separating the brands that allows us to really tap into the culinary trends that are going on regionally.”

    The brands have been doing well. West Coast-based Carl's Jr. has about 1,150 units. Midwest, Southeast, and East Coast-based Hardee's totals about 1,870 units. They are geographically separate and strong, but Jenkins notes that Carl's provocative advertising began overtaking and becoming Hardee's brand ethos. “But it never really resonated in a big way with Hardee’s,” he says. He adds that by separating them, CKE can spur unprecedented growth for both brands.

    Two new ads emphasize these divergent paths. The recent, quasi-psychedelic, youth-oriented “Call of Carl's” ad voiced by Matthew McConaughey spotlights the Western Bacon Cheeseburger and promotes craving and indulgence. By contrast, the new, languidly paced Hardee's spot “Tastes Like America” features music from hick-hop artist Big Wet and focuses on everyday people sharing special moments with food.

    A YouTube comment from “windsorbear” under the Hardee's ad proclaimed: “I am so, so very happy that Hardee's has brought the 1976 logo back! I am also delighted that CKE Restaurants finally has someone in charge that understands that Hardee's and Carl's Jr. were never meant to become one combined brand. Hardee's has always been a down-home type fast-food restaurant and has a very loyal following.”

    CKE will not be swapping out the new Hardee's logo for the old, but the company hinted at invoking the brand’s past in other ways down the road.

    After extensive market research, leaders at CKE realized they needed to differentiate their two main brands more. “The more we dug into and created new campaigns and created new brand positioning work, it just made more and more sense every step we took,” Jenkins says. And the differences are striking.

    With Carl's Jr. customers, Jenkins explains, “They listen to EDM [electronic dance music], they're into esports and gaming, they’re into soccer. They are coming to Carl's Jr. in the afternoon, and in the evenings they’re going out to the movies or going to a club. Then you look at the Hardee’s customer, and they're talking about college sports, fishing, country music, and NASCAR, and they come in the morning a lot. A lot of times that trip in the morning is a pre-outdoor activity, whether it be going to their favorite fishing spot or going on a hunting trip.” Further, breakfast is about 17 percent of Carl's business, while at Hardee's it is about 47 percent.

    Jason Marker, CEO at CKE Restaurants, Inc., sees two major focal points in this new rebranding strategy. The first is “focusing around the amazing food quality that we have in this brand,” which is one of the reasons he moved over to CKE from KFC last year. “As an example, we have made-from-scratch biscuits in our restaurants. Biscuit bakers come at 4 in the morning and actually start making them. We have hand scooped milk shakes. The chicken tenders that we have are just so incredible. They are hand breaded and hand washed. It's just extraordinary product, and we're the only quick-serve that has permanent 100 percent Black Angus burgers on our menu. It's really a quality food story.”

    The second key point Marker sees is accelerating growth, which means they “need to be crystal clear on who we are, what we stand for, and our brand positioning and our brand values and voice,” he says. The new Hardee's brand campaign is their first since 2010. “These positionings become filters for the whole business,” he continues. “When you define a brand and you say it's about earnestness, authenticity, and pride, and you understand your consumers, your dayparts, and know who you are, then you can create communication and build assets.” This approach will allow them to develop unique pipelines and sponsorships specific to each brand.

    "When you define a brand and you say it's about earnestness, authenticity, and pride, and you understand your consumers, your dayparts, and know who you are, then you can create communication and build assets." — Jason Marker, CKE CEO.

    At the end of April, Hardee's will debut its Memphis BBQ Burger, which is pulled pork barbecue on top of a third-pound Angus patty with crispy onions. “It’s very much an elevated burger experience,” Jenkins says, “but it's still at quick service prices and quick-service speed.” Marker says that the Hardee's $5 All Star meal “is doing exceptionally well,” while their breakfast and Frisco Burger offerings are unique to the brand. On the flip side, Carl's Jr. is promoting their Western Bacon Cheeseburger and are debuting Jolly Rancher milkshakes in the spring and Pastrami Burgers this summer. Both chains offer sliders. “You're already seeing product separation and communication separation,” Marker says, “and we're having great results talking directly to the customers with products they love.”

    CKE is taking cues from millennials and Gen Z in their expectations of freshness, better quality, and better ingredients. Jenkins says the company is probably the only quick-service that every morning “literally cuts onions and tomatoes and pulls leafs of lettuce apart in the back of our restaurants.” They are trying to be burger innovators in the face of the better burger paradigm and maintain “the values and convenience of a traditional [quick-service restaurant].” Hardee's also offers partial table service (food delivered after being ordered up front), a concept typically associated with fast casual.

    Two Carl's Jr. locations, one in Los Angeles and one in Manhattan, are serving wine and beer, but there are no plans to roll out that setup any further—for now. Two NYC locations give the brand a foothold on the foodie culture in that metropolis. “We're pretty excited about our Manhattan restaurants,” Marker says. “We actually have a few built already and we've got plans to build a few more. We love the idea of this powerful, fantastic, West Coast quality brand turning up in the east to give everyone a run for the money.”