Classic Carl’s? Karcher Back in Starring Role : Fast food: A year after his ouster and move to emphasis on price, the Anaheim-based chain reverses course to return its founder as TV pitchman and stress quality again.
ANAHEIM — Hamburger magnate Carl N. Karcher, forced out last year as chairman of the company he founded more than half a century ago, will soon return to his cherished role as television pitchman for the Carl’s Jr. chain.
Karcher’s return as spokesman for the ailing burger chain is part of a revamped marketing program that will emphasize quality rather than low prices at the Anaheim-based fast food chain.
“I’m very happy about coming back as the TV personality for Carl’s Jr.,” Karcher said Monday. “I’d done it for many years and was well-received. I love it. What I want to do is make our business better.”
Karcher’s return to commercials is part of the restaurant chain’s decision to reverse its strategy and once again emphasize the chain’s food quality rather than attempting to cast itself as the low-priced leader, CKE Restaurants Chairman William P. Foley II said Monday.
The marketing shift is designed to help Carl’s Jr. attract more 35- to 50-year-old customers, who generally are willing to spend a bit more for better-tasting food, Foley said.
“In theory, the thought was that you fixed (falling revenue) by lowering the prices, attracting more customers and driving store sales up,” Foley said. “But we basically started to charge our existing customers less, and we weren’t attracting enough new customers to make store sales go up.”
Karcher’s return to television advertisements is one of several recent victories for the fast food leader.
One of Karcher’s pet projects--the test marketing of Green Burrito Mexican-style fast food entrees at a handful of Carl’s Jr. restaurants, which began in September--is “working very, very well,” Foley said. “It’s a bit early, but sales are up 65% so far.”
That news is all the sweeter for Karcher, 78, who, was forced out as chairman of the Carl’s Jr. chain last October during a bitter boardroom battle that turned on the proposed Green Burrito test. Foley, an Orange County businessman who last December took a controlling interest in CKE Restaurants, subsequently invited Karcher to return as chairman emeritus.
Now, some restaurant industry observers are suggesting that Karcher might very well outlast Donald E. Doyle Jr., who joined CKE Restaurants in late 1992 as chief executive and president.
Doyle and Karcher have been at odds over the Green Burrito test and the company’s recent value-oriented advertising, which, critics have complained, came at the expense of the chain’s longstanding reputation for quality. Carl’s Jr. has watched store revenue slide for nearly four years. It recently unveiled a value-oriented menu that’s designed to counter value leaders such as Taco Bell.
Speculation rose about Doyle’s continuing role at CKE Restaurants on Monday when the company announced that Bay Area franchisee Tom Thompson had been hired for the newly created position of chief operating officer of the Carl’s Jr. chain. Thompson will be reporting to Doyle when he begins work next Monday.
Doyle, who was out of the country on Monday and unavailable for comment, is testing the waters elsewhere, said several fast food industry sources. Among other things, Doyle is said to be interested in the chief executive officer’s job at Hardee’s, a Raleigh, N.C.-based fast food chain. Hardee’s did not return telephone calls on Monday.
Foley, who declined to speculate about Doyle’s future at the company, said that Thompson was hired because “we needed a good, solid operations guy at Carl’s Jr. Tom Thompson traditionally has been able to run his restaurants a good deal more efficiently than the company has.”
Thompson, 44, who owns 16 Carl’s Jr. restaurants in the Bay Area, described himself as “always having been an operating person. . . . I’m not driven by finance or marketing, I’ve always been a person who operates restaurants.”
Thompson, who will spend weekdays in Orange County and return to San Francisco on weekends, began his restaurant career 20 years ago with San Diego-based Jack in the Box, where he successfully managed some of that company’s most profitable restaurants.
Earlier this year, Thompson was elected president of the Carl’s Jr. franchisee association, whose members operate 255 of the company’s 650 restaurants. Thompson also played a role in developing some of the chain’s new products, including the recently introduced Parmesan Sourdough Burger and the Chicken Sourdough Italiano sandwich.
“I think it’s important for us to keep the image of having quality foods that you can’t get anywhere else,” Thompson said. “We still need to have the 59-cent burger, but you don’t want to lose that quality image we’ve always had.”
The Carl’s Jr. chain has lost market share in recent years to large, national chains, including Taco Bell and McDonald’s, that successfully marketed themselves as value leaders. Carl’s Jr. has been touting a new, value-oriented menu but the campaign hasn’t generated enough new business, Foley said.
CKE Restaurants was unchanged at $8.50 on Monday in New York Stock Exchange trading.
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