Karcher Hires KFC Veteran to Take Reins : Transition: Retiring Carl's Jr. chief will yield to Donald E. Doyle as the new president and CEO as of Jan. 1.


Carl Karcher Enterprises hired a former Kentucky Fried Chicken executive as its new president Tuesday in a move that marks the beginning of Chairman Carl Karcher's transition to retirement.

In addition, a buyout team that involved Karcher has broken off its quest to purchase the company, which operates the Carl's Jr. hamburger chain, and make it private once again.

Donald E. Doyle, a 16-year KFC veteran who rose to become president of its domestic operations, was selected as president of the 640-unit burger chain effective Jan. 1. The position was earlier held by Donald Karcher, the brother of founder Carl Karcher who died of cancer last May.

But perhaps more significantly, Doyle was also chosen as chief executive officer--a job that has always belonged to Carl Karcher himself. Donald Karcher had been president and chief operating officer. The company said Carl Karcher will remain as chairman.

Karcher, 75, said Doyle has a "great background" and that after a few months of working together, Karcher plans to take a secondary role in daily operation of the company. "I'm going to be very close to the company, but as far being in charge of the whole team," that responsibility will belong to Doyle, he said.

A company statement said Doyle was chosen because of his "impeccable credentials" in running the much larger KFC.

Doyle was also an adviser to Freeman Spogli & Co., the Los Angeles-based investment group that joined Carl Karcher in trying to buy back the company from its shareholders. If the sale had gone through, Doyle was considered a top candidate for the presidency and it was expected that Karcher would have had a greatly diminished role in the running of the company.

But during the several months in which the deal was being scrutinized, Doyle said, he worked closely with Karcher and the two earned each other's mutual respect. Doyle seems to have landed the same role--managing the company with minimum involvement from Karcher--that he would have had if the deal went through.

The proposed sale at $9.50 a share was rejected Friday by Karcher's outside directors and a Freeman Spogli executive said Tuesday that no higher bids are planned.

"We have terminated our negotiations," said Bill Wardlaw, a spokesman for Freeman Spogli. He declined to elaborate.

Peter Churm, chairman of the outside directors group that reviewed the offer, said he is excited about Doyle's appointment.

"He's an outstanding man with an outstanding record," said Churm, who is chairman emeritus of the manufacturer Furon Co. in Laguna Niguel. "I'm very optimistic. In fact, I'm going to buy some stock."

Karcher Enterprises closed Tuesday at $8.375 a share, down 25 cents, before Doyle's appointment was announced.

Karcher himself noted in the company's statement that he believes Doyle's appointment will help meet the committee's mandate to fix the company's problems and fill the leadership void created after his brother's death. He cited Doyle's "rich experience in management, marketing and the restaurant industry." In a later interview, Karcher said the decision to give the chief executive job to Doyle was entirely his own and not done at the direction of the board.

Doyle, 46, began in marketing and strategic planning for KFC in 1973 and was leader of the chain's 5,000 U.S. restaurants from 1984 to 1988.

"I feel terrific," Doyle said in a brief interview Tuesday. "I'm real excited about the opportunity. This is a dream assignment."

Doyle said he has been studying the Anaheim-based company for some months and has been impressed that it ranks high with the public on food quality and brand recognition.

At KFC, he was a proponent of "re-colonelization"--bringing the company back to concentrate on its core product, chicken. He may develop a similar return-to-basics approach at Carl's Jr., which has launched a variety of sandwiches and only recently introduced a low-priced line of hamburgers.

"I'm very much a back-to-basics man," he said, adding that Carl's Jr. has its own unique challenges.

"The real challenge . . . is meeting consumers' expectation for value," he said. "This market, in particular, with the economic situation in California and the heavy competitive situation, makes that a very high priority."

Doyle also was an active participant in civic and business development affairs in Louisville, Ky., where KFC is based. He left about a year after R.J. Reynolds sold KFC to Pepsico in 1986 and was considered for jobs at a variety of fast-food chains around the country.

Analysts remain bullish on Karcher Enterprise's long-term potential. Dave Rose, an analyst for the brokerage of L.H. Friend, Weinress & Frankson Inc. in Irvine, said Carl's has great brand-name recognition and customer loyalty that make it a natural for development.

And Doug Christopher, analyst for the brokerage of Crowell, Weedon & Co. in Los Angeles, said "there's nothing wrong with this company that is not fixable."

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