Karcher Alleges Conspiracy in Ouster as Carl’s Jr. Chairman : Restaurants: Donald E. Doyle Jr., president of the fast-food chain, denied that bylaws were changed to eliminate chairman’s role.
Embattled fast-food magnate Carl N. Karcher alleged Tuesday that the managzement and board of Carl Karcher Enterprises conspired since January to oust him from the company he founded 52 years ago.
Karcher, speaking at length for the first time since he was fired Friday as chairman of the parent of the Carl’s Jr. restaurant chain, charged that President Donald E. Doyle Jr. and the company’s directors changed the company’s bylaws to eliminate the chairman’s role--acting in concert to force him from day-to-day business operations.
The board also granted “illegal” employment contracts to top executives other than himself, the 76-year-old Karcher charged.
Doyle said Tuesday that “there has never been any kind of conspiracy or plot or plan to ease Carl out of the company. And nothing would have made the board or me happier than to see Carl link arms with us and move the company forward.”
The elimination of the chairman from the list of officers named in the bylaws was a simple typographical error that subsequently was corrected, Doyle said. Employment contracts are common “given the uncertainty in a company that went through an unsuccessful” leveraged buyout, he said.
Karcher wasn’t granted a contract because he never asked for one, Doyle said.
Karcher said the first hint that he might not be welcome at the company came shortly after Doyle took over in January, when the new president ended a half-century-old tradition of starting business meetings with a prayer and the Pledge of Allegiance. And, in a final bit of ignominy, Karcher said, the company now demands that he contact corporate security officers before visiting his office, which is on land owned by the Karcher family.
“The way I’ve been treated, I’m surprised that my (office) key still fits,” Karcher said. “I’ve spoken to several retired chairmen in the last few weeks to see how they were treated . . . and nobody was treated the way I was.”
Karcher had been publicly silent since Sept. 1, when he issued a statement saying he would try to replace board members who disagreed with him on a controversial marketing plan for the Carl’s Jr. chain.
Karcher said he granted the interview Tuesday to correct “half-truths” in a Monday Times article in which newly elected company Chairman Elizabeth A. Sanders described Karcher as an obstructionist who has “run roughshod” over the company.
Karcher disputed Sanders’ contention that he was interfering with the board’s plan to boost flagging sales and profit at the 560-unit Carl’s Jr. chain.
“I had been in the dark, hidden, out of the loop,” Karcher said. “I didn’t develop this company by being out of the loop. . . . It bothered me being left out.”
And Karcher denied Sanders’ allegation that he settled disagreements with executives and board members by hanging up the telephone on them or walking out of the room. “I never hung up on anybody,” he said.
Karcher described Sanders, a longtime board member and Karcher family friend, as a “great, personable person . . . (who) did a great job at Nordstrom,” where she rose to executive rank after starting out as a sales clerk at the department store chain. “But I asked her to resign from the board,” Karcher said. “I think that answers it.”
Karcher’s highly publicized feud with Carl’s Jr. management was sparked late last year when the board rejected his bid to buy back the company with financing from Freeman Spogli & Co., a Los Angeles investment firm. The deal would have allowed Karcher to exchange stock for cash that he needed to repay loans.
His personal debts “are like an elephant stepping on you,” Karcher said. “They are pretty heavy. And they’ve got the control.”
Completing the failed leveraged buyout “would have gotten me out of trouble,” Karcher said. “When they turned me down, that put me back in the box. . . . I hope and pray I’m not going to the poorhouse.”
Karcher’s personal finances took a beating in recent months because, like many Southern Californians, he invested in real estate just as the market soured. His investment in Monnig Development Inc., an Inland Empire construction company that fell on hard times amid charges of mismanagement, “cost me a fortune,” Karcher said.
But he vehemently denied the board’s oft-repeated charge that he stood to benefit financially if Karcher Enterprises agreed to test-market Green Burrito Mexican-style food products at Carl’s Jr. restaurants. Board members allege that Karcher would have received a $6-million loan had the test gone forward.
“They betrayed me, no question,” Karcher said of the board members, who have been both friends and business associates for a decade or longer. “It’s sad.”
