Carl Karcher, chairman and chief executive of Carl Karcher Enterprises, likes to exude an old-fashioned, on-the-farm attitude. He held true to form when he spoke Monday at a University of San Diego-sponsored business seminar, where he touted the benefits of positive thinking, warned against worshiping money and hailed the spirit of competition.
He touched briefly on his up-by-the-bootstraps success story, but focused primarily on the values-laden philosophy that helped him turn a small hot dog stand into an empire of 457 Carl's Jr. fast-food restaurants.
"Feel good about yourself," Karcher, 68, implored the 75 people attending USD's long-running Update breakfast seminar. "Be proud of the things you stand for."
These days, Anaheim-based Karcher Enterprises is standing for a "back to basics" theme, as last year it restructured several divisions, laid off some headquarters staffers and switched its $12-million annual advertising account to Della Femina, Travisano & Partners, the advertising firm that was recently retained by San Diego-based PSA.
But the company paid a price: Earnings for the second quarter ended Aug. 9 fell 65% to $1.5 million, while revenues dropped nearly 6% to $77.7 million. The earnings drop reflected five consecutive quarters of reduced earnings.
"We were at one time . . . trying to build a niche between the coffee shops and the fast-food industry," Karcher said. "We went a little too far in the (coffee shop) direction, which helped frustrate our guests as well as our employees. We had too many things happening; we can't be all things to everybody."
Indeed, Karcher, who now predicts that revenues will top $1 billion by decade's end, spoke highly of his competition and the founders of other fast-food restaurants, and urged that businesses should never fear their competitors.
"Competition," he said, "keeps us going, keeps us sharp (and) keeps us on our toes. If you let competition concern you and discourage you, you'll probably end up failing."
Born one of eight children on a family farm in Upper Sandusky, Ohio, Karcher flunked out of school in the eighth grade. He moved to Los Angeles when he was 20 and worked at his uncle's feed store. He opened his first hot dog stand in downtown Los Angeles in 1941.
His company went public in 1980 and opened its first franchise two years later--one of the last major fast-food chains to become a franchiser.
Karcher, once a franchising skeptic for fear it would hurt quality, now is a firm believer. Franchising, he said, "gives us a chance to be more flexible, and it supports the free enterprise system."
In the near future, all Carl's Jr. restaurants outside California and Arizona will be franchised, he said, adding that he hopes to open restaurants in Colorado, Oregon and New Mexico in 1986.