ANAHEIM, Calif. -- Carl Nicholas Karcher finds himself in a frustrating pickle. The 83-year-old no longer controls the company that he founded and that bears his name.
He can do nothing but sit back and watch as the current regime struggles to put the floundering burger chain back on track.Certainly, his title and the office that comes with it are impressive: chairman emeritus of the fourth-largest burger chain in the United States. A $400,000 annual salary. A corner office with double wooden doors, a presidential oak desk and a balcony overlooking the sprawling Anaheim headquarters of CKE Restaurants Inc.
But after a distinguished career building the Carl's Jr. burger empire from a single hot-dog stand to a chain of more than 900 fast-food restaurants, including operations in Utah, Karcher is resigned to watch the corporate turmoil from what amounts to a somewhat ceremonial spot.
He has seen shares of CKE, which also owns the Hardee's and Taco Bueno chains in the South and Midwest, lose 80 percent of their value in 1999 and an additional 45 percent this year.
His own stake that was once valued in the $100 million range is today at $3 million. Much of the stock tumble has been attributed to a downturn at Hardee's, the East Coast chain that CKE acquired three years ago for $327 million.
Like a parent watching a wayward child, Karcher would love to help. New CEO Tom Thompson speaks admirably about Karcher and credits him with helping to bring CKE out of its trouble to the prosperity it enjoyed through 1998. But Thompson's team does not allow Karcher an inside role in strategic decisionmaking.
While Karcher still maintains a voting seat on the board, he has no say in day-to-day operations.
"I give them my 2 cents," Karcher says, but he realizes CKE is now somebody else's company. He refers to CKE Chairman William Foley as "Mr. Foley" and calls him "my boss."
One look around CKE headquarters and there's no mistaking that Karcher, the barrel-chested burger baron famous for handing out Scripture verses that double as vouchers for free food, was once the top dog. Those days are mostly memories now -- just like the scores of photographs that line Karcher's office.
There's the dedication at the Ronald Reagan Presidential Library in Simi Valley and the photo with Mikhail Gorbachev -- clear indications of Karcher's standing after a humble beginning.
The third of eight children, Karcher was born in Upper Sandusky, Ohio, in 1917. By 1939 he had arrived in California and in 1941 he used his green, two-door Plymouth as collateral for a $311 loan and bought a hot-dog stand that he set up in downtown Los Angeles. His first-day revenue was $14.75.
From that stand, CKE would grow to record annual sales of $2 billion last year. Karcher is adamant about sharing credit for his successes with his wife of more than 60 years. The Ohio farm boy married Margaret Heinz in 1939, and together the couple have raised 12 children.
At their 60th anniversary celebration last November, some family members offered insights into how Karcher's reputation as a corporate penny-pincher developed. "Leftover English muffins for breakfast became garlic bread for dinner, which the next morning became French toast," said Rosie Karcher, their ninth child.
The anecdote reflects a business motto that Karcher inherited from his father, Leo: "Watch the pennies and the dollars will take care of themselves."
Karcher quotes the exact price he got when he traded in his green Plymouth to buy that original hot-dog stand. He knows the names and faces of all his longtime employees, and like a bullpen pitcher waiting for the call from the manager to come in and save the team, he says: "I think we can right the ship. I know we can."
But it seems unlikely that his magnetic charm and unwavering vision will again take a major role at CKE, which lost $29 million last year.
The company, and Karcher personally, entered a difficult period in the early '90s: the recession and riots hurt its core Southern California market, and there was the death of Carl's brother, Don, who had assumed huge responsibility for the company's operations.
The company was on the brink of bankruptcy in 1993, losing $5.5 million that year. Karcher proposed to sell Carl's Jr.'s all-American fare with Green Burrito Mexican food under one roof. Though that idea would later prove very profitable for Carl's Jr., it did not sit well with CKE directors at the time. Karcher was fired in April 1993.
"I remember that day like it was yesterday," Karcher recalls, a slight grimace on his face. "It was a tough time for me personally."
Foley, an old business friend of Karcher's, was then running Fidelity Title company in Irvine. The complex deal that Foley arranged in 1994 was in some ways both a psychological and financial bailout of Karcher. But as a result, Foley took control of CKE.
Leaving his ceremonial office, Karcher pockets a few of his trademark vouchers and heads across the parking lot to a Carl's Jr. restaurant. A key part of Karcher's job these days is getting out to stores as the chain's ambassador, greeting diners and talking to employees.
"How long have you worked here?" he asks a cashier. "One year? That's not bad at all." Even hurried diners look up from their Bacon Western Cheeseburgers to see the man behind the famous Happy Star logo, and they also appear impressed.
"People have always just gravitated to Carl," said his brother Frank, a former CKE executive and franchisee of several Carl's Jr. restaurants. "There's just something about him that people love."