Hardee's(R) Sells 11 Restaurants to Successfully Complete Strategic Refranchising Plan
Carpinteria, Calif.--(BUSINESS WIRE)--CKE Restaurants, Inc. (NYSE:CKR) announced today the sale of 11 Hardee's® restaurants in the Jefferson City and Columbia, Missouri markets to Rising Stars, LLC. This transaction marks the successful completion of the strategic refranchising program the Company originally announced in April, 2007.
Under the refranchising program, CKE Restaurants sold a total of 238 Hardee's units to franchisees and secured commitments for 115 new franchise restaurants under development agreements for those markets. The Company sold 38 units, or 19 percent, more than it originally announced it would refranchise as the demand for these units exceeded expectations. The Company currently owns 477 Hardee's restaurants out of a total of 1,913 company-owned and franchised Hardee's restaurants and 415 Carl's Jr. ® restaurants out of a total of 1,194 company-owned and franchised Carl's Jr. restaurants.
This transaction is the latest step in the Company's program to increase overall unit growth, particularly franchise unit growth. For fiscal 2009 to date, the Company has entered into a total of 20 franchise development agreements representing commitments for 380 restaurants, consisting of 236 domestic units and 144 international units, including agreements to enter three new countries - China, Pakistan and Kazakhstan. Over the next five years, the Company anticipates it will add more than 800 new restaurants to its global store base. In the process, franchised restaurants should increase from 71 percent of the system to approximately 75 percent and international restaurants should increase from 10 percent to 19 percent of the system.
The principals of the franchisee purchasing the 11 Hardee's restaurants in the Jefferson City and Columbia markets – Steve Rosenfield and Buddy Brown – currently own and operate more than 100 Carl's Jr. and Hardee's restaurants in Colorado, Georgia, Kansas, Missouri, Montana and Wyoming. Rising Stars, LLC has also committed to build a minimum of three new Hardee's restaurant locations over the next five years in the Jefferson City and Columbia markets. The transaction was brokered by Franchise Resale Consultants, LLC, d/b/a Praetorian Group.
"Buddy and I are very excited to increase our ownership in the Hardee's brand with the purchase of these 11 units," said Rosenfield. "The Jefferson City and Columbia markets are a natural geographic extension from our Kansas City store base, and we look forward to participating in the ongoing success of Hardee's."
The Company's chief executive officer Andrew F. Puzder commented, "The sale of 11 restaurants to Rising Stars, LLC marks the successful completion of CKE's refranchising program. We exceeded our goals for this program with respect to both the number of restaurants we refranchised and the number of restaurants franchisees committed to build under the development agreements we executed as a part of the sales. We are also pleased that we have been able to complete our strategic refranchising program without the need to provide company-backed financing for any transaction, further underscoring the return to success that we have achieved at Hardee's. Although our announced refranchising program has been completed, additional multi-unit franchise opportunities are available in the midwest and eastern United States. Information on these opportunities can be found at www.ckefranchise.com."
"Steve and Buddy were the first franchisees to acquire Hardee's restaurants under our refranchising program almost two years ago," Puzder continued. "Their subsequent purchase of 30 stores in the Kansas City market in late 2007 combined with this transaction further emphasizes our shared belief in and commitment to the Hardee's brand."
As of the end of its fiscal 2009 third quarter, CKE Restaurants, Inc., through its subsidiaries, had a total of 3,110 franchised, licensed or company-operated restaurants in 42 states and in 14 countries, including 1,185 Carl's Jr. restaurants and 1,912 Hardee's restaurants.
Safe Harbor Disclosure
Matters discussed in this news release contain forward-looking statements relating to future plans and developments 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, 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.
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