Carl’s Jr. CEO Ned Lyerly has been with the chain for nearly 40 years, citing a strong “family culture” that prioritizes customer service as a major driver of his loyalty.
That culture, he adds, was intentionally created by founder Carl Karcher, who started the business as a hot dog stand on July 17, 1941 in Los Angeles. To this day, the Karcher Family is still involved in the business as franchisee owners and board members.
It’s an interesting case study as few restaurant chains have stood the test of time in the cutthroat quick-service restaurant segment as long as Carl’s Jr., which quickly evolved from that hot dog stand to a drive-in barbecue concept in neighboring Anaheim, California, and has since expanded to just over 1,000 units throughout the U.S.
The chain now generates about $1.3 billion in sales, according to Technomic estimates, and in an interview earlier this week, Lyerly said the company is also experiencing its highest average unit volumes in its history. The private company wouldn’t disclose just what those AUVs are, but QSR Magazine estimates them to be about $1.25 million.
The company also recently reached its 1,000th international unit milestone, thriving in legacy markets like Mexico, while planting flags in new markets like Peru.
For Lyerly, these continued benchmarks after eight decades are a testament to the brand’s focus on staying true to Karcher’s vision.
“One of the things that always sticks out to me is that Carl never stopped dreaming. His dream is still alive and we’re still dreaming big for the future,” Lyerly said. “The thread that runs through it all is his approach to people and communities. His goal was to make guests happy every day.”
Not coincidentally, the chain returned to national marketing in early 2020 with a new “Feed Your Happy” campaign. Carl’s Jr.’s approach to marketing has long been one of its biggest differentiators and the brand continues to push the envelope here, most recently launching a non-fungible token and auctioning off an iconic burger bite image, for example.
Whether leveraging trendy NFTs or an animated Happy the Star mascot or a scantily-clad celebrity like Kim Kardashian, the goal has remained the same.
“Our brand has always made sure that our food is the story–that we’re romancing the food. To me, that means conveying those moments of satisfaction. Our [marketing] themes are built around that moment of satisfaction and we’ve done that in unique and creative ways,” Lyerly said. “We’re the original purveyors of quality food in QSR. That’s our license and we have to double down on it.”
That license comes from Carl’s Jr. history of menu “firsts”–or at least early movements–in the QSR segment. It was the first to launch a charbroiled turkey burger and a CBD-infused burger, for example, and one of the first to add a Beyond Meat burger and a prime rib burger. More recently, the chain debuted a new chicken sandwich–one of the few in the industry that is hand-breaded, adding a significant (and operationally complex) point of differentiation in an increasingly competitive category.
“We view it as our mission to satisfy the taste and cravings of QSR consumers and provide them with something further evolved than our competitors. It’s not always easy,” Lyerly said. “But it’s important for us to leverage our unique equities against our competitors and a broader spectrum of people in the space–whether quick-casual, delivery or whatever–and be better at what we do to make sure we’re continuing to satisfy our consumers’ appetites. The evidence of our success is the highest-ever AUVs.”
Further, despite the overall industry taking a major hit from the COVID-19 pandemic, Carl’s Jr. is riding four consecutive quarters of same-store sales increases and is positioned favorably to be even stronger on the other side. With a strong franchise base, a new loyalty program lined up to launch later this year, a new online ordering platform and a growing delivery channel, Lyerly expects the chain’s momentum to continue.
“We had a great strategy going into the pandemic. Like everyone else, we had to pause through the initial uncertainty and challenges, but there has since been acceleration and we’re in a place now that is far ahead of what we could have imagined,” he said. “When I think of the next 80 years, I think our trajectory is awesome. It’s really built off a platform of leaders and innovation, of reimagining what fast food can be.”
The chain will mark its 80th anniversary milestone with a special “birthday menu” July 17 in Anaheim that includes cake shakes and a Famous Star Hot Dog to pay homage to its roots. The entire U.S. system can also celebrate with a buy-one-get-one for 80-cent burger if they join the company’s mailing list to receive a digital coupon.
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