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The Orange County Register, Calif., Jonathan Lansner column
[January 21, 2008]

The Orange County Register, Calif., Jonathan Lansner column

(Orange County Register, The (CA) (KRT) Via Thomson Dialog NewsEdge) Jan. 18--FOND MEMORIES OF BUSINESS WITH CARL: Burger baron Carl Karcher touched few lives more than Andy Puzder's.

Two decades ago Puzder was a corporate attorney in St. Louis. Karcher, who died last week at 90, had a Midwest legal mess unrelated to his Carl's Jr. fast-food chain.

The relationship started out as classic business litigation. It morphed, over 20 years, into a deep friendship, and, curiously, Puzder becoming the chief executive of the burger empire Karcher started, now known as CKE Enterprises.

That old lawsuit, over a bungled investment, lasted three years before a settlement. In that time, the two men, 43 years apart in age, discovered their numerous shared beliefs, from business philosophy to deep religious convictions.

"Carl had that personality, that charm," Puzder says. "One of those rare people that when you shook his hand, you knew you were with a good person."

It was a relationship that included frequent visits to the Karcher home in Anaheim well after Carl had left the daily business grind. It was a closeness that made Puzder race down the freeway from his current home in Santa Barbara to an Orange County hospital when he heard Karcher had taken a final turn for the worst.

Puzder, 57, recalls that all Carl could do at that last meeting was squeeze his hand and wrinkle an eyebrow in response. And Puzder regrets not visiting his pal earlier in the hospital stay, when Karcher's health had been far better.

"He's a great friend," Puzder says. "And like a second father to me."

By 1989, Puzder had rid Karcher of that Midwest litigation. Karcher had other legal issues, though, so Puzder started commuting one day a week to Orange County to handle those chores.

What Puzder soon discovered was that Karcher's personal finances were a mess. Karcher had become very wealthy when his Carl's Jr. sold stock to the public through CKE. But, Puzder says, Karcher was too fixated on the burger business to successfully navigate what had become a significant second business: his own fortune. As a result, Karcher was mired in a convoluted collection of troubled personal investments.

"Carl was very trusting of people. He didn't think people would lie to him.

He just thought people needed a chance, and then -- like him -- they would succeed," Puzder says. "People were not as honorable as he'd expect them to be. People took advantage of him." When Puzder eventually convinced Karcher that he had serious financial troubles -- no easy chore, Puzder recalls -- Karcher, in return, had a life-changing request.

"You better move out (here) and get me out of trouble," Puzder recalls Karcher telling him before the lawyer relocated to Orange County.

Making Karcher's situation doubly troubling, the early 1990s were not kind to Carl's Jr. Price wars had broken out among industry giants. Mexican food was drawing burger fans away. Resulting ad battles trimmed profits and left Carl's Jr. little marketing room to maneuver.

Karcher came up with what seemed to be a brilliant solution: Partner with a small Mexican-themed chain, Green Burrito, to put two flavors into Carl's Jr. locations. This dual-branding concept, offering customers greater choice, is widely accepted today. But 15 years ago, it was seen akin to a brand's surrender.

So Karcher's board of directors fired their chain's founder. One problem: Karcher had a side deal with the Green Burrito owner to help fix his personal finances.

Karcher and Puzder crafted a solution that stabilized Karcher's finances and put Carl's Jr. back in friendly hands. Another Puzder client, title insurance pioneer Bill Foley, created an investor group to buy a controlling stake in CKE, Carl's Jr.'s parent company. It was a gratifying solution for Karcher. It returned him to the board of the company he founded until 2004, when he retired for health reasons.

And, as it was throughout his career, Karcher had found another winner.

There are now 400 Carl's Jr. stores with Green Burritos.

"Carl was first with a lot of things," Puzder says. "He was one of those people. He'd have 20 ideas, and two were great. You had to have somebody to help discern the good from the bad."

So how did Puzder end up a burger CEO like Karcher?

To make a long story short, Foley liked his burger deal so much that he lured Puzder into a corporate attorney gig at Foley's title empire, Fidelity National.

Then Foley decided Carl's Jr. wasn't enough, so he acquired Hardee's, a struggling East Coast chain. When that bet blew up, Puzder was put in charge of the Hardee's turnaround and eventually Carl's Jr., too.

The attorney was now fast-food full time. It wasn't unfamiliar territory.

Puzder says that in his years as Karcher's attorney, the pair spent hours talking about the restaurant industry.

Puzder recalls Karcher's light touch to business discussion. When Puzder was still the commuting attorney, one day he noticed Carl's Jr. no longer sold his favorite teriyaki chicken sandwich. When he asked Karcher about the menu change, Karcher said, "So you were the one guy ordering that!" At Hardee's, Puzder used several tricks he learned from Karcher, such as instituting procedures for training and to fix service and cleanliness. And he lived by a Karcher creed -- "You have to set the example" -- and visited more than 100 Hardee's in his first year on the job.

Eventually the East Coast chain, best known for its biscuit breakfasts, was successfully repositioned to be much like Carl's Jr. has been marketed: a place known for the higher-end burger in the fast-food niche.

That marketing has been edgy, to be kind. At times, these ads have an almost R-rated twist that a conservative Karcher didn't appreciate. And Puzder says Karcher wasn't shy with criticism, though the elder entrepreneur also knew the bottom line was that the best customers at Carl's Jr. -- and Hardee's, too -- were primarily young male adults, an audience that likes ads with a kick.

"We at least agreed that he had the right to tell me what he thought and I had the right to do it," said Puzder, who said the harshest critic in the family was actually Karcher's wife, Margaret, who died in 2006.

The essence of what Puzder learned from his friend was that success in fast food is really about the basics: decent food, friendly servers and clean stores. At CKE, it's added up to a business with 3,000 stores spread across the nation, and it's also in 13 countries.

"He had a very, down-home approach to business. He made it very easy," Puzder says.

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