Andrew F. Puzder knows what everyone expected when he
took over CKE Restaurants Inc.
“I wasn’t a restaurant guy,” he says. “I had been a lawyer, and
everybody thought they brought me in to take the company into
bankruptcy.”
Puzder doesn’t mince words about why that thinking was justified when he first took over Hardee’s and then became president
and CEO of the entire CKE family in September 2000.
“The stock had been at $42; it was at $2,” he says. “We had $600
million in debt, the banks were threatening to foreclose, and
Hardee’s was the worst fast-food company in America.
“The first day I got a sales report, and sales were down 12 percent and transactions were down 19 percent. I’m sitting at my
desk thinking, ‘What the hell am I doing?’”
CKE, through its franchisees, subsidiaries and licensees, currently includes more than 3,000 Hardee’s, Carl’s Jr., Green Burrito
and Red Burrito restaurants. But with 13 major banks circling the
company like sharks, it appeared everything was falling apart.
Though other portions of the business were profitable, Hardee’s
was losing more money than the then-$1.78 billion CKE could
recover. In fiscal 2001, CKE had a net loss of $194.1 million.
Puzder knew that the quick-service industry was a profitable one
— you can drive down any main road to see examples of that —
but he had to get to the front lines of the business to fix the restaurants.
“As CEO of a company like this, I could put my feet up on the
desk and answer e-mails and call in my direct reports and have
them let me know what’s going on,” he says. “But if you don’t go in
the restaurants, you don’t really know what’s going on.”
Even though he thought that was priority No. 1, he couldn’t just
leave the company in limbo to go on a restaurant tour. So the turnaround began with Puzder changing top personnel to get Hardee’s
working on finding its niche. Once those people were in place, he
delegated to his new talent and went to visit his 32,000 employees
to find the solutions that would put the company back on the path
to growth.