For CKE Restaurants—owners of iconic quick-service brands Hardee’s and Carl’s Jr.—a few key numbers from 2020 make it easy to be optimistic about the future. In the midst of a tumultuous spring for the industry, CKE saw sales begin to bounce back in a big way by May and has since produced nine consecutive periods of same-store, year-over-year sales growth. More recently, CKE posted three consecutive periods of sequential same-store sales growth.
That positioned the brand for its best start to a year ever—January topped all company records in terms of year-over-year same-store sales growth. Simply put, where other brands struggled, Carl’s Jr. and Hardee’s have thrived.
“It was a challenging year, but I’m so proud of our restaurant teams and operators,” says CKE Restaurants CEO Ned Lyerly. “From the start of the pandemic, we partnered with our franchisees to chart the course forward and the results were fantastic. And while our iconic brands were already heavily focused on off-premises channels, the pivots made to further emphasize that aspect of our businesses have put us in a really great place.”
With serious momentum behind them, the brands are now unveiling a store prototype built for the future, moving toward smaller dining rooms and more space reserved for things like extra drive-thru lanes, designated curbside pickup parking, and easily accessible delivery windows for third-party drivers. Along with it, Hardee’s and Carl’s Jr.’s have redesigned kitchens with off-premises channels in mind—Lyerly reports that Hardee’s and Carl’s Jr. did about 75 percent of their business through off-premises channels prior to the pandemic, and that number leaped into the 90-plus-percent range in 2020. He says that while the company expects the percentage of off-premises sales to land somewhere in between those two numbers, he doubts it will ever return to pre-pandemic norms.
“Our new restaurant design is meant to meet the changing demands of our guests,” Lyerly says. “We want to be offering our customers what they want, where they want, and how they want it, so it was important to take a look at our restaurant design and service modalities to make sure we’re creating a modern guest experience.”
The design changes also signal the franchisor’s commitment to the future of the brands, and its aim to capitalize on the fact that, with so many restaurant closures in 2020, an agile buildout fit for various locations will help grow both brands in a major way. With roughly 4,000 restaurants systemwide as it stands, CKE is aiming for 6,000 restaurants in the near future.
Other signs of a commitment to the future? The franchisor is creating a diverse media mix that includes everything from national television advertising, on down to one-to-one digital marketing on social media channels. CKE has returned to a partnership with ad agency 72andSunny, aiming to “amplify unique core equities and get back to aspiration tonality in our advertising,” Lyerly says. Those core equities include a premium product line unique to the quick-service space, says Lyerly, including charbroiled thickburgers, hand-breaded tenders, and a made-from scratch breakfast menu.
The brands are also rolling out robust online ordering platforms and a loyalty program that will be a key part of the guest experience moving forward. All of this modernization for the two legacy brands has had a palpable effect on the franchisor-franchisee relationship. Lyerly, who has been with CKE Restaurants for 36 years but became CEO two years ago, says he is most proud of a single statistic: franchisee satisfaction has risen 20 percent during his tenure.
“These are fantastic, iconic brands that we take great pride in,” Lyerly says. “We have really solid partnerships with our strong franchisee network. They have helped build these brands and we recognize that their success is our success. Our entire restaurant culture is built around supporting them, so that they can support restaurant managers and the staff on the ground, who can give our guests the best possible experience. We’re really excited about our future together.”
For more information on franchising with CKE Restaurants, check out the company’s website.
