On his first day in the fast-food business, Carl N. Karcher took in $14.75. In fiscal year 2007, his namesake CKE Restaurants Holdings, Inc. earned revenues of approximately $1.5 billion. The story of CKE Restaurants, and its flagship Carl’s Jr.? restaurant chain, is the quintessential American success story. What began as one man’s entrepreneurial venture in 1941 has evolved into one of the most powerful entities in the quick-service restaurant industry.
It all began in Los Angeles when an Ohio farmer’s son named Carl Karcher was rising before the sun each day to deliver baked goods. Seeing how well business was doing at one of his stops – a hot dog cart at the corner of Florence and Central – Carl and his wife, Margaret, made a leap of faith and borrowed $311 on their Plymouth automobile and added $15 in savings to purchase the business. From their newly purchased cart, they sold hot dogs, chili dogs and tamales for a dime, and soda for a nickel. Within a few years, Carl and Margaret owned and operated four hot dog stands in Los Angeles. In 1945, the Karchers moved the short distance to Anaheim and opened their first full-service restaurant, Carl’s Drive-In Barbeque. A year later, hamburgers were added to the menu for the first time.
Business boomed in the postwar years as more Americans came to California to soak up the sunshine. In 1956, Carl expanded his business by opening the first two Carl’s Jr.? restaurants in Anaheim and nearby Brea. They were so named because they were junior versions of Carl’s original drive-in restaurant. Carl used an innovative system for serving guests. Customers paid for their orders when they were placed, and by the time they had put away their wallets, their food was nearly ready. It was the beginning of a long tradition of Carl’s Jr. “firsts” in the quick-service restaurant industry.
By the end of the 1950s, there were four Carl’s Jr. restaurants in Orange County, easily recognized by new signs that featured a vibrant yellow star. The restaurants also had a new supervisor, Donald F. Karcher, Carl’s younger brother, who would later become the company’s president.
Within a decade, Carl was operating 24 restaurants, with a fast-growing reputation for quality food and great service. The company incorporated in 1966 as Carl Karcher Enterprises, Inc.
Carl’s Jr. launched a major expansion in 1968, building attractive new restaurants featuring used-brick interiors, tiled roofs, carpeted dining rooms and cushioned seats – all innovations in the fast-food industry. There was even music and partial dining room service for guests. The menus were streamlined for faster service, featuring hamburgers, hot dogs, fries and malts.
By 1975, there were more than 100 Carl’s Jr. locations in Southern California and the company expanded into the northern part of the state. Carl’s Jr. celebrated its success by building its Anaheim corporate headquarters in 1976. The following year, it became the first quick-service chain to offer salad bars in all 200 locations. In 1977, a new 149,000-square-foot distribution facility was erected adjacent to the administrative offices. The first out-of-state restaurant opened in Las Vegas in 1979. By the end of the decade, sales exceeded the $100 million mark.
In 1980, the company hired its 10,000th employee, doubling its employee count in just three years. Brothers Carl and Don Karcher were the winning team at the top, serving as chairman of the board, and president and chief operating officer, respectively. In 1981, with 300 restaurants in operation, Carl Karcher Enterprises became a publicly held company. The following year, the first Carl’s Jr. in Arizona opened for business. In 1984, Carl’s Jr. was franchised for the first time.
As consumer tastes evolved, so did the menu, with the addition of the signature Western Bacon Cheeseburger?, breakfast items, a charbroiled chicken sandwich line and all-you-can-drink beverage bars. By the end of the decade, sales topped $480 million at 534 restaurants. The company also opened its first international units in the Pacific Rim and Mexico. In addition, Carl’s Jr. was one of the first chains to introduce a debit card payment system, inviting customers to use their ATM cards in the restaurants.
Following Don Karcher’s untimely death in 1992, a new management team was installed in 1994, headed by CEO William P. Foley II and President and Chief Operating Officer Tom Thompson. Carl Karcher Enterprises became a wholly-owned subsidiary of CKE Restaurants, Inc. (CKE). A revitalization plan was established that included a major remodeling/image enhancement program, along with a dual branding effort with Green Burrito?; an innovative partnership first envisioned by Carl, who was by now CKE’s chairman emeritus.
CKE next began a series of headline-grabbing acquisitions of other restaurant chains, including Hardee’s?, the nation’s fourth-largest burger quick-service restaurant chain, with nearly 2,500 locations predominately located in the Southeast and Midwest.
CKE underwent a significant financial restructuring in 2001. This was followed by a multi-year, multi-staged strategy to re-invent the Hardee’s brand and re-establish its relevance in the quick-service restaurant industry. Hardee’s strategy has included quality, service and cleanliness initiatives, and a new menu and marketing strategy. The Hardee’s “Revolution,” introduced in early 2003, centered around Hardee’s 1/3- , 1/2- and 2/3-pound Angus beef Thickburgers?.
In March 2002, CKE purchased Santa Barbara Restaurant Group, Inc. (SBRG), acquiring with it direct ownership of the Green Burrito brand, a key piece of its dual-branding strategy. More than 400 dual-branded restaurants have opened under the Carl’s Jr./Green Burrito? and Hardee’s/Red Burrito? brands. The company has plans for more than 100 additional dual-branded locations over the next several years.
Currently, CKE remains committed to a premium product positioning at each of its brands and to continuous improvements in the way the company manages its operations: Restaurant cleanliness, guest service and convenience must continue to be taken to an even higher level. Importantly, CKE recognizes the opportunity it has each and every day in the cities and towns in which it operates to make a positive impact on the community. In the spirit of the company’s founder, Carl N. Karcher, CKE believes it can best share in its success by offering support to its neighbors and assisting families in need.
In July 2010, CKE Restaurants was acquired by Columbia Lake Acquisition Holdings, Inc., an affiliate of Apollo Management VII, L.P. This new phase allows CKE to continue to grow and succeed as a privately-held company under the ownership of Apollo. The management team and day-to-day operations remained the same.
The 2010s brought continued innovation to the Carl’s Jr. and Hardee’s brands as both chains rolled out Hand-Breaded Chicken Tenders. The premium-quality tenders are made fresh throughout the day in each restaurant.
Carl’s Jr. and Hardee’s began offering Charbroiled Turkey Burgers in 2011, marking another industry first; becoming the first national fast food chains to offer Turkey Burgers.
Currently, CKE remains committed to premium product offerings at each of its brands and to continuous improvements in the way the company manages its operations: Restaurant cleanliness, guest service and convenience must continue to be taken to an even higher level.
Additionally, CKE recognizes the opportunity it has each and every day in the cities and towns in which it operates to make a positive impact on the community. In the spirit of the company’s founder, Carl Karcher, CKE believes it can best share in its success by offering support to its neighbors through its scholarship and charitable giving programs, including the Stars for Heroes campaign which raised $1 Million in 2011. CKE is also working toward greater sustainability with the help of company-wide initiatives, including the corporate Green Team.
Carl Karcher Tribute
Carl N. Karcher was born January 16, 1917 in Upper Sandusky, Ohio. His formal schooling lasted through the eighth grade, when he left school to assist his parents on the family farm.
1941 was the year that changed Carl’s life, from a career standpoint. He and Margaret purchased a hot dog cart on July 17, 1941 for $326 ($15 cash and $311 borrowed on his 1941 Plymouth Super Deluxe). The first day’s sales totaled $14.75. Business grew, and on January 16, 1945 Carl opened Carl’s Drive-In Barbecue in Anaheim, Calif. The first Carl’s Jr. restaurants opened in 1956.