Industry News | February 2, 2016 | QSR Exclusive Brief

For CKE Restaurants, the World Is Its Oyster

image used with permission.

While Carl’s Jr. and Hardee’s continue to push the envelope stateside with new menu items like the Steakhouse Thickburger and newly nabbed celebrity Chef Michael Voltaggio to promote it, their parent company’s international division is even busier. Last year was the fifth year in a row that CKE Restaurants opened more international locations (100 in 2015) than domestic stores.

For Ned Lyerly, president of CKE International, the brand’s position as a “quick service–plus” concept makes it versatile—a key trait for any restaurant looking beyond U.S. borders.

“I think we do make adaptations for each market," Lyerly says. "In India, we take a beef-oriented brand and retool that entire menu line to be on a multiple vegetarian platform. When you’re operating in the Middle East, due to religious and cultural reasons, we don’t serve any pork products, and everything needs to be served halal,” Lyerly says.

CKE also tweaks its store designs depending on the country. In Saudi Arabia, for example, stores must have curtains around some booths for the privacy of families and women. In Mexico, it’s also important to make accommodations for families, although the execution is far different. 

“The family component of business in Mexico is really important. We don’t spend a lot of time focusing our marketing efforts around kids' meals or toys, but  what we did in Mexico is we built these premium, high-quality facilities that had really nice playgrounds, were glass and walled off from the main dining area," Lyerly says. "[It's] shielded in such a way that the noise and the messiness may not spill into the main dining room.”

In the next month or so, CKE will also open its first Japan locations with a deal for 150 locations, although Lyerly says the brand’s presence in the country could reach 1,000. He adds that while Japanese consumers’ discerning palates works well with the product, the real challenge involves finding high-quality sites, given the country’s diminutive size.

Design is another factor that changes drastically outside the U.S. While 99 percent of U.S. restaurants are freestanding drive thrus, that style only comprises about 40 percent of international stores. CKE matches its facilities to the local environment, and in many cases, that means elevating the restaurant experience.

Last, but certainly not least, CKE Restaurants tweaks its image to better suit different cultures. In the U.S., Carl’s Jr. and Hardee’s are known for risqué ads often featuring attractive women eating burgers in a suggestive manner. This tactic may appeal to young American consumers, but it would be offensive in many Middle Eastern markets.

“We adapt our marketing to still be edgy, youthful, and aspirational, but at the same time, culturally appropriate," Lyerly says. "Our Middle East franchisees have started to do a great job of very interesting, high-quality advertising that adapts some of the young-hungry, guy-gal focus that we have in an edgy, somewhat irreverent manner, but using  humor and maybe a bit more than sex appeal to draw attention to our brands.”

As of now, overseas CKE Restaurants account for 19 percent of CKE’s total unit count, but Lyerly says it will soon grow to 25 percent and possibly reach 30 percent in the coming years.

For more brands looking to export their operation abroad, read our January feature on international markets.

By Nicole Duncan

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