Carl’s Jr. is known for many things…

http://www.youtube.com/watch?v=4gby0zfCYiA

New Carl's Jr. Restaurant Tops Sales Record in Tough Economy January 28, 2009

• For fiscal 2009, Carl’s Jr. opened a total of 17 company-operated units - an increase from 16 units opened in fiscal 2008 and the highest level of company-operated openings since fiscal 2001. In addition, Carl’s Jr. domestic franchisees opened 29 units during fiscal 2009, equaling their second-highest total unit openings in the past eight years.

• “Despite a tough economy, Carl’s Jr. is setting sales records in new markets, continuing to grow its unit count and giving customers what they want – premium quality burgers at fair prices,” said Andy Puzder, CEO.

Justifying its sexy approach

• Carl's Jr. in recent years have become known for salacious advertising starring Paris Hilton, Hugh Hefner, Padma Lakshmi and, most recently, "The Hills" star Audrina Patridge. CEO Andy Pudzer has said that his brands' comparatively small advertising budget necessitates a sexier approach if they're going to cut through the clutter.

The Demographic

• CKE Restaurants Inc., owner and franchisor of Carl's Jr. and Hardee's restaurants, adopts a creative approach to our advertising, “It is intended to communicate the core message of our premium quality food to our target audience of young, hungry guys. We do not aim to exclude or offend any other group with our efforts, but merely to appeal and amuse a very specific audience.”

Does this Approach Work?

• The sales statistics show that Carl’s Jr. is currently having record sales; even in a poor economy.

• In contrast to the positive sales, the commercials aired have instigated protests from several groups advocating family values.

Income Statements (Gross Profit)

Carl’s Jr. Vs MacDonald's (2008)

0.5 1 1.5 2 2.5 3 3.5 4 4.50

100002000030000400005000060000700008000090000

100000

f(x) = 6113.4 x + 57632.5

Carl's Jr. Gross Profit

Quarters for 2008

Dol

lars

(in

thou

sand

s)

0.5 1 1.5 2 2.5 3 3.5 4 4.50

500000

1000000

1500000

2000000

2500000

f(x) = − 138120 x + 2476300

Macdonald's Gross Profit

Quarters for 2008

Dol

lars

(in

thou

sand

s)

Has Carl’s Jr. gone too far?

Sources• http://adage.com/article?article_id=138063

• http://www.nytimes.com/2009/03/18/business/media/18adco.html?_r=1

• http://www.retailerdaily.com/entry/43589/guy-thing-carls-jr/

• http://www.mahalo.com/carls-jr

• http://www.carlsjr.com/company/releases/new-carls-jr-restaurant-tops-sales-record-in-tough-economy/

• http://finance.yahoo.com/