Splitting up the twins: Hardee’s, Carl’s Jr. to get own identities
Jason Marker became the new CEO of CKE Restaurants in April 2017.
Hardee’s and Carl’s Jr. being the same concept with different names is one of those things we hungry Americans have accepted without protest—like the Midwest actually being in the center of the country, social media making us feel more isolated or round pizza delivered in square boxes—just deal with it and keep moving, people.
Jason Marker, the new CEO of CKE Restaurants since April 2017, is leaning on his marketing background and a freshened leadership team to split up its conjoined QSR twins, refocus marketing on made-from-scratch food and update restaurant design templates as it seeks to build a thousand new restaurants in the next five years.
Big changes on all fronts feel like the right move after an extended rough patch for the Franklin, Tennessee-based parent company. Former CEO Andrew Puzder’s bid for a spot in Trump’s cabinet fizzled while the restaurants’ hypersexual advertisements were searing the eyeballs of customers, franchisees and industry watchers alike.
Marker and company have a lengthy to-do list in turning the page for two brands that put up a combined $4.4 billion in annual sales.
After taking over the helm following two years as KFC’s U.S. brand president, Marker set out to improve franchisee relations and directed his team to make decisions based on “data over opinion.” That’s all boilerplate new CEO speak, but the larger plan hinges on his quest to sharpen each brand’s identity without totally abandoning economies of scale through things such as a limited number of shared menu items and supply goods like universal hamburger buns.
“We’ve always had two brands and over time we merged them under one marketing campaign and that creates potential compromise, because these brands are both independent,” he said. “Carl’s Jr. has always been West Coast cool, bold, passionate, disruptive, kinda edgy, burgers, bikinis and all that kind of stuff—then on the other hand you’ve got Hardee’s, which we discuss more as down-home food done right.”
Even though recent promotions, like a slider limited time offer earlier this year, featured both brands in the same commercial, Marker said Hardee’s would double-down on breakfast and handmade items with Carl’s Jr. taking a more modern, playful approach.
A Carl’s Jr. ad earlier this year featured Matthew McConaughey’s voice boosting “biggity-wiggity buckwild beef” bacon cheeseburgers, while Hardee’s “Tastes Like America” campaign feels like a CMT video with vintage pickup trucks, a dude in a wolf sweatshirt and old ladies yucking it up at a bowling alley. Differentiation accomplished.
CKE Restaurants new Chief Marketing Officer Jeff Jenkins said he joined the company for two distinct reasons: Marker’s record transforming “aging and tired” KFC into a marketing powerhouse and what he termed “his reputation as a leader and a human being.” Asked for specifics, he talked about his own friends reminiscing about getting biscuits for breakfast when they were kids or the 1990s NASCAR film “Days of Thunder” with a Hardee’s-branded car driven by one of the movie’s main characters played by Cary Elwes.
“Everybody knows about the provocative history of both brands,” Jenkins added. “Being regionally relevant has special powers.” He said even the still-fresh memories of scantily clad models doing lewd things with burgers is a worthy example of marketing that attracted eyeballs, even though they took the conversation away from food quality.
“That is something we will continue to carry forward in these two brands,” he said about being provocative. “We’re not going to outspend anyone in the category—we’re not as big as those folks—but we need to have a differentiated position and we’ve got to be impossible to ignore.”
Future marketing, he stressed, won’t be alienating to women or other groups. Highlighting super-indulgent, massively unhealthy products like the two-third-pound Monster Thickburger also is a no-go going forward, as each brand seeks to boost customer frequency that is the lifeblood of the QSR category.
Following a path blazed by brands such as KFC, Wendy’s and Arby’s, Jenkins’ team is looking to get creative and diversify its messaging beyond big TV campaigns.
Labeling today’s phone-tethered youngsters as “screenagers,” he said “the notion of big A advertising” is no longer the best way to reach consumers on the quickly evolving, hour-by-hour basis its competition requires.
“We’re not going to outspend anyone in the category,” says CMO Jeff Jenkins.
Getting back to biscuits
As both brands mature into distinct individuals, Jenkins said Hardee’s will once again highlight in-store biscuit bakers getting started before the sun comes up each day.
When I pointed out my own childhood memories of Hardee’s “made-from-scratch” biscuit ads from the 1990s, the new CEO had a quick retort: “The world changes and it doesn’t, right?” Other points of differentiation for the larger twin include hand-breaded chicken tenders, so-called hand-scooped ice cream and its new Honey Butter Chicken Biscuit.
On its shift back into breakfast, Marker said consumers are gravitating toward snackable, portable breakfast products and high-end, high-calorie beverages like the new Mocha Coffee Milkshake.
“I’m a little reluctant to go too far down the innovation path, other than to say in the coming months there will be a vast array of different products from Hardee’s and Carl’s that you’ll start to see in the marketplace that are really pushing the boundaries on talking to our strengths, but evolving,” he said.
Responding to value promotions from its competitors, both Hardee’s and Carl’s Jr. launched All Star meals in 2017 that included items such as double cheeseburgers, spicy chicken sandwiches with fries, a chocolate chip cookie and soda for $5. After a positive reaction from customers, the All Star meals were expanded to $6 and $7 price points to bring some of the premium products, including hand-breaded chicken tenders, into the value-focused segment.
During the International Franchise Expo in June, I was saddened to discover the flagship-style Carl’s Jr. in Manhattan location closed after just five months—especially distressing in light of the fanfare before its debut. Marker said it was a frustrating situation with one of its franchise operators—out of 350 independent franchise entities in the system—but said he supported the closure “for a variety of reasons” without listing any in particular.
Instead, he shifted the attention to more positive stats, like newer locations on Coney Island and in Brooklyn, as well as opening “net 160” restaurants in the last four years and his hopes of building 1,000 new locations in the next five years.
The now-shuttered Manhattan Carl’s had black-and-white photos of surfers and skateboarders on its walls, but there was no hiding from a wave of brutal reviews that included New York’s Eater calling the burgers “uniformly awful.” Yelpers were somewhat sunnier, giving the location two and a half stars.
Asked if big-city locations were off the table, including those without drive-thrus in dense, urban areas, the CEO said he’s still interested in such “alternative asset types” but said non-traditional units like airports would continue to be part of its growth strategy.
Looking into the mirror
Wherever your eyeballs roam, the brightest signs of a new era can be seen in the new store design for Hardee’s that’s on trend—almost to a fault. Its new look includes distressed wood paneling, black window frames, brick accents, white subway tiles, brightly colored logos and shiny metallic accents that recall a 1950s malt shop.
Further Americana touchstones include a stars-and-stripes mosaic made from red, white and blue license plates, a cutaway of an ‘80’s-era NASCAR racer at the drive-thru window and, yes, even more flags. Its former CEO missed out on a spot in the current administration, but there’s no mistaking the ‘merica charm of its new face.
As both brands seek to fend off QSR Goliaths, Jenkins said spontaneous media stunts would become increasingly important among its customer base. That includes continued study of third-party delivery providers, and looking even further down the road to a world with self-driving cars that could have unforeseeable consequences on the streets and in restaurants.
“The question is, how can you be lean and agile and pivot and respond to those and start to connect the dots before the consumer,” he said. “It’s about making some bets, seeing where it takes you and trying to transform alongside the consumer.”
With his goal of elevating Hardee’s and Carl’s Jr. as two of the “most loved regional QSR brands in America,” Marker said the separation of these conjoined twins will be a three-year journey that includes rummaging around the brand archives and revisiting marketing campaigns from days gone by to remind the team, customers and franchisees of the intentions of their original founders.
“Why do we exist, what’s our role and purpose, and what do we stand for from a food point of view?” Marker asked. “Until you’re crystal-clear on those components, it’s very hard to market the brand, develop assets, and, even from a service promise, really execute the brand as well as you can.”