New Ingredients for Karcher Enterprises Board : Corporation: More changes of directors are expected this year as the fast-food company tries to reverse three years of sagging sales.

For 52 years, there was no doubt that company founder Carl N. Karcher had a firm grasp on the chairman’s suite at Carl Karcher Enterprises.

It was Karcher, now 76, who ran the company, selected the directors and handled advertising as the Carl’s Jr. pitchman. But given recent developments, Karcher Enterprises might have to install a revolving door on the chairman’s suite.

On Oct. 1, that handpicked board of directors ousted Karcher as chairman and replaced him with longtime friend and board colleague, Elizabeth A. Sanders.

In mid-December, Sanders denied a report that she planned to resign as chairwoman during the company’s annual meeting in June. But Sanders added that she would step aside if that was what a majority of board members wanted.

Meanwhile, a financially crippled Karcher gained an ally in Orange County businessman William P. Foley II, who headed an investor group that became the dominant force in the company and won two new board seats.

After Sanders talked about her future role, Foley volunteered that he was a “logical” choice to lead the company, although he previously had said he had no plans to take the top seat. Sanders acknowledged that Foley could be elected chairman easily if he wanted the post.

And who does Karcher--who has since been invited back as chairman emeritus--envision sitting in the office? “That’s not something I’m going to talk about,” said the man who typically offers an opinion on just about anything.

Adding to the speculation, some members of Foley’s investor group wondered aloud if there was even a need to fill the chairman’s seat.

The board of directors at Karcher Enterprises will likely change during the coming year. After awarding seats to Foley and fellow investor Daniel D. (Ron) Lane, the company expects to see at least one board member resign during 1994--possibly before the annual meeting in June.

About the only certainty for Carl’s Jr. is that the new year will generate additional uncertainty--not welcome news for a restaurant chain that is struggling to reverse a three-year sales decline.

Karcher Enterprises reported a $1.5-million profit for the third quarter that ended Nov. 1, but revenue continued to fall and sales at restaurants open for more than a year were off 7.4%.

Donald E. Doyle, the company’s president, hopes to reverse that slump by cutting corporate costs, trimming the chain’s cluttered menu and introducing new entrees that are more likely to sate the public’s appetite for better food values.

Doyle blamed the revenue drop on “recessionary factors” in California, where most of the chain’s 649 units are.

But critics maintain that the company is generating profits by cutting costs faster than sales are falling. “You can only cut costs so much,” said Andrew Puzder, Carl Karcher’s personal attorney. “At some point, if sales don’t go up, you’ll be losing money.”

Doyle continues to have the support of a strong majority of the company’s nine-member board. And Karcher and Foley support the cost-cutting move.

While the boardroom dispute at Karcher Enterprises has dominated Orange County business news pages, it’s unlikely that the dispute will have a long-term impact on the chain’s sales, said Miles Turpin, chairman of Grey Advertising, the Los Angeles-based advertising agency that recently won Karcher Enterprises’ advertising account.

Unless product quality or service suffers, most consumers are not drawn into corporate tiffs, he said. That was the case when Turpin handled advertising for a Southern California company that declared bankruptcy.

“Everyone (at that company) was so sensitive about the bankruptcy, but all the market research showed that almost no one (outside the company) knew about it,” Turpin said. “So often, these things that are traumatic for the company are not a big deal for anyone outside. Besides, Carl Karcher is back as chairman emeritus, so it should be a non-issue.”

The company’s big challenge is not only to provide “damn good fast food as it always has done, but to address concerns about prices,” Turpin said. “People have always said the food tastes great. But in tight times, people are saying that (Carl’s Jr. is) getting pretty expensive.”

Will Karcher Enterprises’ founder return to his role as television pitchman for the Carl’s Jr. chain, along with the company’s Happy Star symbol?

Turpin and company officials have declined to comment on upcoming advertising strategies. But Puzder said the company founder is ready to do whatever he can to help reverse the sales decline.

Negotiations to determine Karcher’s job description and salary are under way, and a resolution is expected in the next few weeks, Puzder said.

If revenue continues to fall, the new board will have to devise additional strategies that will help Carl’s Jr. reclaim market share lost to stronger competitors such as McDonald’s and Burger King.

Some restaurant industry observers maintain that Karcher Enterprises must add some new menu items, a prospect that could reopen the door to Karcher’s plan to test-market Mexican-style food products from Anaheim-based GB Foods.

It was Karcher’s demand that the company test-market Green Burrito brand products that ultimately led to the board dismissing the founder as chairman. Karcher has declined to say whether he intends to press the company to reconsider the Green Burrito idea.