The keys to successful franchising are easy enough to understand. It takes a strong brand backed by a knowledgeable corporate team coupled with franchisees boasting keen business sense to make the model work. On paper, the plan seems simple, but the execution is far more difficult. For example, a Quiznos master franchisee with 22 units sued its parent company in October 2010 over breach of contract.
Cases like this prove that positive working relationships are necessary to success. According to one of its master franchisees, CKE, the parent company to Carl’s Jr. and Hardee’s, has made it a goal to maintain a peaceful symbiosis.
“They have a very good partnership with their franchisees, and the franchising group has a very good relationship with Hardee’s,” says Frank Westermajer, a former corporate employee of Hardee’s and now president of Westar Foods, which owns 31 Hardee’s franchises. “You see articles every day about franchisees suing their franchisor. We don’t have that relationship with Hardee’s Franchise Group.”
Westermajer says this synergy was key to CKE’s successful refranchising and brand revitalization programs over the past few years.
Led by current CKE President and CEO Andrew Puzder, the Hardee’s brand developed a comeback plan in the early 2000s that focused on superior customer service, clean and maintained stores and a menu makeover.
Hardee’s tailored its menu to include standouts such as made-from-scratch biscuits prepared by Hardee’s employees, freshly made Angus beef burgers and hand-breaded chicken tenders.
The new menu and focus on customer service gave Hardee’s a new face and wider appeal to potential franchisers. In 2007, CKE announced it would sell off more than 200 corporate-owned Hardee’s in the Midwest and Southeast. Westar purchased 18 of these locations in Omaha, Neb. and across Iowa.
“Today we have 31 units and have two rebuilds planned for this calendar year as well as two new properties we have acquired to build new stores,” Westermajer says.
Westar’s highest volume store in Des Moines, Iowa, is also its smallest store, square footage-wise, but it sits on a 2.7-acre site. Westar is building a new 72-seat restaurant on the same site while keeping the current store in operation. It is also building in Burlington, Iowa, a market Hardee’s exited a few years ago. Westar owns and operates three stores in Des Moines, which is one of its strongest markets. “It’s a very up and coming, young city,” Westermajer says. “They also understand that when we come into town, we bring a great quality product and they appreciate that.”
CKE has completed its refranchising program, but this 50-year-old brand has other franchisees retiring from the business. Westar has already acquired four stores from previous franchisees. It also converted two shutdown Steak and Shake restaurants into Hardee’s. It complements these quick turnaround strategies with ground-up constructions.
“We will continue to do both – acquiring existing franchise restaurants where available and build new restaurants,” Westermajer says.
Westar’s newest opportunity has led to a contract with Corner Bakery to open five units of the fast-casual brand. Westar will open its first unit in Kansas and has brought in another partner to help manage the new venture. “Hardee’s is still our bread and butter and where our present future is,” Westermajer says. “[But] Corner Bakery is an opportunity we are excited to see evolve. It’s a great concept that has an outstanding management group behind it.”