Franchisee Buy-in was Key to Turnaround of Hardee’s, Carl’s Jr.

 

 

puzder

At IFA’s 53rd Annual Convention on Feb. 19, Andrew Puzder, CEO of CKE Restaurants, franchisor of the Hardee’s and Carl’s Jr. restaurant chains, told 3,600 attendees that getting buy-in for his unconventional approach to compete with larger restaurant change was a critical component of his turnaround strategy. It has been a guiding principle which has propelled the brands to 3,300 restaurants, with growth for ten consecutive years, including during the recession, and operations now in 28 countries.

Hc1w0QuB-1N1eeEzlqZBBT5U3_DGXlEwd36OG91VFTw

“We have a simple philosophy at CKE Restaurants:  If the franchisees make money, we all make money.  We believe we’re the most franchise friendly company around.  For over 10 years, we’ve had a Carl’s Jr. and a Hardee’s franchisee on our corporate Board of Directors,” said Puzder.

Puzder talked about how Hardee’s and Carl’s Jr. bucked the conventional wisdom in the early 2000’s with the rollout of the $6 burger for $3.99. The franchisees in the system were very concerned consumers wouldn’t pay $4 for a burger, particularly during a time when most restaurant chains were selling smaller burgers for less money.  Yet by testing the burger in a corporate store in California and demonstrating to the franchisees in the system that the product sold “off the charts,” the brand was able to roll it out nationwide.

“Being able to prove the concept in company owned markets and having the franchisees involved from the beginning were essential to making this product a success,” said Puzder.

The CKE advertising strategy also bucked the conventional wisdom. By involving franchisees in the decision-making process and explaining the rationale for targeting “Young, Hungry Guys” with famous models like Paris Hilton, the franchisees “generally, if reluctantly, went along”.

Puzder said their advertising strategy to compete with brands spending exponentially more dollars on television was to break through the clutter and generate earned media. The numbers and results speak for themselves. According to Puzder, a Kim Kardashian ad got 330 million earned media impressions, Kate Upton got over 1.5 billion in 210 countries and Nina Agdal is close to a billion.