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China to Get Its First Taste of Carl's Burgers : Fast food: Anaheim-based Karcher Enterprises plans to open a restaurant in Beijing next month.

February 22, 1992|CHRIS WOODYARD | TIMES STAFF WRITER

ANAHEIM — The Carl's Jr. happy star is going to the land of the red star.

The Anaheim-based parent company of the Carl's Jr. hamburger chain plans to open its first restaurant in China next month.

The company has signed up a licensee in Beijing to operate the restaurant, which could serve as a prototype for future Carl's Jrs. in that country, sources said.

Carl Karcher Enterprises will join a growing list of U.S. fast-food chains that have taken an interest in the Chinese market.

The Kentucky Fried Chicken division of Pepsico operates several KFC restaurants in Beijing and Shanghai, and McDonald's expects to open its first restaurant in Beijing later this year.

Karcher officials refused to confirm the China deal. They said confidentiality agreements prevent them from discussing the matter. But other company sources said the Carl's Jr. should open in two weeks.

For Karcher, the deal is the latest in a series of international agreements. A Carl's Jr. restaurant in Monterrey, Mexico, reportedly had people lined up around the block on opening day last year, and business has remained strong since.

Carl's Jr., whose restaurant symbol is a smiling star, has operations in Malaysia and Japan and just announced plans for restaurants in four nations in the Middle East.

"I see that company on the brink of its international growth potential," said Dave Rose, an analyst for Cruttenden & Co., an Irvine investment firm.

"If Mexico is indicative of what's going to happen in China and the Middle East and the rest of the world, it's pretty exciting."

The international deals provide more good publicity than profits, at least initially, analysts say.

The royalties and licensing fees from such deals provide steady though unspectacular profits, they say.

"When the majority of your operations are domestic and that's where you're established, the fees and royalties aren't going to make that much difference on the bottom line for the next five years," said Doug Christopher, an analyst for the Los Angeles brokerage Crowell, Weedon & Co.

The first Kentucky Fried Chicken restaurant opened in Beijing in 1987 and sells about $2 million worth of chicken a year, double the amount of most other KFC restaurants overseas, according to a company spokesman.

There are six KFC restaurants in China.

Times staff writer Cristina Lee contributed to this story.

Star Power Carl's Jr. restaurants already opened or planned in foreign markets: Mexico Open: 1 in Monterrey Planned: Another in Monterrey; others in Guadalajara and Jalisco Japan Open: 10 Middle East Planned: Kuwait, United Arab Emirates, Egypt and Saudi Arabia Malaysia Open: 3 in Kuala Lampur China Planned: Beijing

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