Carpinteria, Calif.,// PRNewswire-FirstCall // -- CKE Restaurants, Inc. (NYSE: CKR) announced today the sale of 29 Hardee's(R) restaurants as part of its ongoing strategic refranchising program that was originally announced in April, 2007. To date, the Company has sold 224 restaurants to franchisees and secured commitments for 105 new franchise restaurants under development agreements for those markets.
The Company most recently completed the sale of 23 restaurants in Indiana and Ohio to Midwest First Star Inc. The principals of the franchisee purchasing the restaurants -- Farooq Shah and Carri Simon -- are new to the Hardee's franchise system, although Ms. Simon has been a Hardee's restaurant operator on the company side for nine years, the last two as a regional vice-president of operations. Midwest First Star Inc. has also committed to build a minimum of seven new Hardee's restaurant locations over the next seven years in these markets.
"We are very excited to take over these 23 restaurants in the Indiana and Ohio markets," said Farooq Shah. "We believe Hardee's is a great brand and look forward to expanding the concept in our markets."
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 23 restaurants to new franchisee Midwest First Star Inc. A strong working knowledge of operations is essential to the viability of any franchisee. I know Carri well and she is an excellent Hardee's restaurant operator. Her experience with Hardee's restaurant operations and these restaurants in particular, will be instrumental in Midwest First Star's success. 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 the continued growth of the Hardee's brand."
The Company also previously completed the sale of six restaurants in the Davenport, IA market to Westar Foods, Inc. Westar joined the Hardee's franchise system last year through the purchase of the Des Moines and Cedar Rapids, IA markets. Westar has also committed to build a minimum of four new Hardee's restaurant locations in the Davenport market over the next four and a half years. Both transactions were brokered by Franchise Resale Consultants, LLC, d/b/a Praetorian Group.
As of the end of its fiscal 2009 first quarter ended May 19, 2008, CKE Restaurants, Inc., through its subsidiaries, had a total of 3,101 franchised, licensed or company-operated restaurants in 42 states and in 13 countries, including 1,162 Carl's Jr.(R) restaurants and 1,923 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.