Mr. Puzder: CKE is really two principal brands: Carl's Jr., which is on the West Coast, but principally in California; and Hardee's, which is in the Midwest and the Southeast. Carl's Jr. was started by Carl Karcher, who bought a hot dog cart in 1941 in Los Angeles, California, and grew that business to where it became public in 1981. Hardee's was started by Wilbur Hardee back in Greenville, North Carolina, in 1961. So last year, we actually celebrated the 60th anniversary of Carl's and the 40th anniversary of Hardee's. CKE acquired Hardee's in 1997. Carl's Jr. and Hardee's have similar backgrounds. They both started out with charbroiled hamburgers and grew to places with a little more variety, and both grew from small operations to large restaurant chains. We have some products in common between the two brands, but still some differentiation. That's the general history of it.
TWST: Could you explain the customer base that you appeal to today, and
also who are some of the main competitors you're up against?
Mr. Puzder: In both brands, Carl's and Hardee's, you're up against
McDonald's, Burger King, Wendy's and Jack in the Box. Jack in the Box is
stronger in the West, and Wendy's is stronger in the Midwest and
Southeast, so you have a little balance there. Also, out here you have
In-N-Out Burger, which you don't have in the Midwest and Southeast, but
in the Midwest and Southeast you have Sonic, which you don't find many
of in the West. So you have some major competitors, it's a very
competitive industry. The customer base at Carl's Jr. is the heavy fast
food user, probably between the ages 17 to 35, with an emphasis in the
20-year-old range. Although, when you're in the restaurants, everybody's
there, from moms with little kids to elderly couples, so it has a broad-
based appeal. Hardee's customer base is probably a little older in its
appeal. It's got a very large breakfast business (it does a larger
percentage of its business in breakfast than any of the other major
brands) and that skews toward a little older customer group. But, again,
at lunch and dinner, it's still going after those heavy fast food users.
Both brands right now are selling what we call 'The Six Dollar Burger'
which is a half pound of meat, so they are going for that heavy fast
food user pretty predominantly.
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