CARPINTERIA, Calif., May 1 // PRNewswire-FirstCall //-- CKE Restaurants, Inc. (NYSE: CKR) announced today the sale of 59 restaurants as part of its ongoing strategic refranchising program that was originally announced in April, 2007. To date, the Company has sold 195 restaurants to franchisees and secured commitments for 94 new franchise restaurants under development agreements for those markets.
The Company most recently completed the sale of 51 restaurants primarily in the Champaign, IL, Paducah and Louisville, KY markets to MJKL Enterprises Midwest, LLC. The franchisees purchasing the restaurants are Margaret LeVecke, Jason LeVecke and Carl LeVecke. MJKL currently operates 58 Carl's Jr.(R) restaurants in Arizona. With the purchase of these additional restaurants, MJKL now owns 109 restaurants under the Hardee's and Carl's Jr. flags. MJKL has also committed to build a minimum of 35 new Hardee's restaurant locations over the next eight years in these markets.
"We have always been happy to have Carl's Jr. as a part of our family," said franchisee Jason LeVecke. "We are elated to become part of the Hardee's brand and look forward to the future success of the company nationwide."
The Company's president and chief executive officer Andrew F. Puzder commented, "We are very pleased to continue our strategic refranchising program with the sale of 51 restaurants to MJKL Enterprises Midwest, LLC. As the daughter and grandsons of our founder, Carl Karcher, Margaret, Jason and Carl are certainly carrying on the family tradition by operating Carl's Jr. and now Hardee's restaurants. The purchase of these Hardee's units increases their ownership to more than 100 units and further reflects their commitment to the company. This transaction both lowers our capital requirements and increases our free cash flow while allowing us to further concentrate on growing our core markets. We look forward to continuing to secure additional development commitments in our Hardee's markets, and to the brand's continued growth."
Earlier this month, the Company also completed the sale of eight restaurants in the Little Rock, AR market to Saddle Peak LLC. Saddle Peak has also committed to build a minimum of five new Hardee's restaurant locations in the market over the next four years. Both transactions were brokered by Franchise Resale Consultants, LLC, d/b/a Praetorian Group.
As of the end of its fiscal fourth quarter on Jan. 28, 2008, CKE Restaurants, Inc., through its subsidiaries, had a total of 3,083 franchised or company-operated restaurants in 42 states and in 13 countries, including 1,141 Carl's Jr. restaurants and 1,926 Hardee's restaurants.
Matters discussed in this news release contain forward-looking statements relating to future plans and developments, financial goals and operating performance that are based on management's current beliefs and assumptions. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond the Company's control and which may cause results to differ materially from expectations. Factors that could cause the Company's results to differ materially from those described include, but are not limited to, whether or not restaurants will be closed and the number of restaurant closures, consumers' concerns or adverse publicity regarding the Company's products, the effectiveness of operating initiatives and advertising and promotional efforts (particularly at the Hardee's brand), changes in economic conditions or prevailing interest rates, changes in the price or availability of commodities, availability and cost of energy, workers' compensation and general liability premiums and claims experience, changes in the Company's suppliers' ability to provide quality and timely products to the Company, delays in opening new restaurants or completing remodels, severe weather conditions, the operational and financial success of the Company's franchisees, franchisees' willingness to participate in the Company's strategies, the availability of financing for the Company and its franchisees, unfavorable outcomes in litigation, changes in accounting policies and practices, effectiveness of internal controls over financial reporting, new legislation or government regulation (including environmental laws), the availability of suitable locations and terms for the sites designated for development, and other factors as discussed in the Company's filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward- looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the New York Stock Exchange.
SOURCE CKE Restaurants, Inc.