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Carl’s Jr. Test of Green Burrito Gets Go-Ahead : Fast food: The Anaheim-based chain is also negotiating to try out Long John Silver’s fish at eight locations.

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TIMES STAFF WRITER

Less than a year after a brutal boardroom fight erupted over introducing dual menus at its restaurants, the Carl’s Jr. fast-food chain has agreed to test Green Burrito Mexican-style food in six locations and is negotiating to add Long John Silver’s fried fish at eight other outlets.

The move to the dual menu strategy, announced late Thursday, is an effort by the Anaheim-based hamburger chain to give families a wider choice of fast-food meals. The strategy is essentially a smaller version of the food courts at shopping malls.

Carl’s Jr. will add the test to its ongoing value menu concept, which is aimed at promoting good food at lower prices.

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The value menu has not spurred sales as much as the parent company, CKE Restaurants Inc., had hoped, mainly because the company rolled out its program long after other chains had established theirs. So the market test of the dual menu idea has been expected.

“Had the value menu blown everyone’s socks off, we wouldn’t do this,” William P. Foley II, CKE’s chairman, said candidly. “We also are trying to be responsive to franchisees, who want us to try something new.”

Foley said he is “real excited” about the dual menu strategy and that it is part of an “overall concept and plan to try a number of ideas.”

Franchise stores in Laguna Niguel and the Palm Desert area are among the six outlets that CKE will change over in the next month to accommodate Green Burrito foods. A third franchise location and three company-owned sites remain to be selected.

Foley said the change-over will consist mainly of making room on menu boards for Green Burrito meals, training employees to handle those products, changing over cash registers to record the separate transactions, and changing signs. Carl’s Jr. and Green Burrito will share profits from the test sites. No remodeling should be needed, he said.

If the concept proves successful, the deal also provides for CKE to exchange warrants for up to 20% of the stock in Green Burrito’s parent company, GB Foods Corp. in Anaheim, and gives GB Foods warrants to buy up to 2.5% of CKE stock. Voting control over stock bought, however, would remain with the chairmen of the respective companies.

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CKE, meantime, is continuing talks with Long John Silver’s to add the Louisville company’s seafood meals to five Carl’s Jr. outlets in San Diego County and up to three stores in the Bakersfield area. Foley said both companies are anxious to complete the transaction.

The dual concept menu with Green Burrito was promoted a year ago by CKE’s founder, Carl N. Karcher, then the company’s chairman. Independent directors didn’t want to sell competing products and, more important, didn’t like a number of strings that came with Karcher’s proposal.

As part of that deal, Karcher, then in deep financial trouble, would have received a much-needed loan from William M. Theisen, who controls GB Foods and became its chairman this week. Theisen also would have joined CKE’s board as vice chairman.

Karcher’s insistence that his plan be adopted instead of the value menu then backed by Chief Executive Donald E. Doyle and other directors led to a bitter and much publicized board battle and to Karcher’s ouster Oct. 1 as CKE’s chairman.

Foley led a team of investors who rescued Karcher from his financial trouble by taking control of most of Karcher’s stock. Foley, acting as a mediator, helped to pave the way for Karcher’s return as chairman emeritus, and Foley took over as chairman earlier this year.

During the rescue effort, Foley had said that he supported the value menu and would give it time to work, holding the dual menu strategy in reserve.

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CKE’s directors voted unanimously, without abstentions, at their board meeting Monday to test market the dual menu concept.

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