Article Excerpt:
TWST: We'd like to begin with a brief historical sketch of CKE Restaurants and a picture of things as they are now.Mr. Puzder: The company was founded in 1941 by Carl Karcher with a hot dog cart in Los Angeles. Hardee's was founded in 1961 by Wilber Hardee in Greenville, North Carolina. Both companies have a very lengthy and storied history. The Carl's Jr. brand is owned by the holding company, CKE Restaurants. In 1997, CKE Restaurants bought Hardee's Food Systems, so that's when the two brands were first merged. Carl's Jr. is a very strong brand in the western United States, particularly in California. It's the 11th largest hamburger quick-service chain in the country. Hardee's is principally in the Midwest and Southeast. It's the 10th largest hamburger QSR in the United States. Initially, when we bought Hardee's, it had been in a decline for a number of years, and that decline continued until about 18 months ago. This change was brought about through service and cleanliness initiatives implemented in the restaurants from 2000-2003. Then we switched Hardee's to a business plan that is very much the Carl's Jr. business plan. Carl's sells big, juicy, delicious burgers to young, hungry guys, and Hardee's now does the same. They don't have the same menu, but they do serve big, juicy, delicious burgers to young, hungry guys. We implemented something called the Hardee's Revolution, which put 'Thickburgers' into the Hardee's restaurants. These are one-third, one-half and two-third pound, large, juicy, delicious burgers. We took about 40 items off the menu, including fried chicken and roast beef. These were items that a lot of people identified with Hardee's. But sales had declined substantially, so we went to this Thickburger menu, and for the past 21 periods in a row, both Hardee's and Carl's have had positive same-store sales. Our stock has gone from the $6 range up to the $16 range, and there has been a big turnaround in the company.
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