It’s a Deal: Carl’s Jr. to Add Green Burrito Items to Its Menu at 140 Restaurants : Fast food: The ‘dual concept’ cost founder Carl N. Karcher his CKE chairman’s job in 1993. He had pushed to test market the idea but board balked.

Pairing burgers and burritos--the concept that cost fast-food pioneer Carl N. Karcher his job in late 1993--will become a reality as the Carl’s Jr. chain adds Green Burrito Mexican-style fast food at more than 140 existing restaurants, both companies said Tuesday.

The announcement ends a bitter disagreement that had pitted burger baron Karcher against board members at the restaurant chain he founded in 1941. CKE Restaurants Inc.’s board of directors forced Karcher out as chairman during the fight, shortly after refusing Karcher’s demand to test market Green Burrito’s menu at Carl’s Jr. restaurants.

Karcher, now CKE’s chairman emeritus, praised the agreement and predicted that the introduction of Mexican-style fast food at Carl’s Jr. restaurants will drive revenue and bolster the chain’s flagging profits.

“We’ve come the long way around the horn,” Karcher said. “I got pretty beat up over this, you know, and I’m thrilled to death that we got this [agreement] put together. I really feel that this is a new beginning for Carl’s Jr.”

The plan to add Green Burrito menu items at 140 existing Carl’s Jr. restaurants over five years was something of a surprise because CKE and Green Burrito’s parent company, GB Foods in Newport Beach, have filed civil lawsuits against each other in recent months, alleging various violations of their joint marketing agreement.

The companies said that the suits were being dismissed because executives now believe that “their best interests were in pursuing a mutually beneficial business relationship rather than litigation.”

William P. Foley II, CKE’s chairman, said that test market data, not the threat of GB Foods winning its lawsuit, drove the agreement. “The lawsuit was really irrelevant,” he said “We gave it no credence during the process.”

Foley said that data generated by a test at three restaurants showed a dramatic increase in revenue that boosted the stores’ profits. Part of the revenue increase came from stronger lunch sales, but Foley said that Green Burrito’s menu prompted “a terrific increase in dinner traffic . . . and Carl’s restaurants have not been crowded at dinner.”

CKE had begun test-marketing Picante Grill, its own Mexican-style menu, but consumers didn’t care for the menu offerings. “That’s the thing about retail,” Foley said. “People will vote with their wallet. They’ll tell you what they like.”

Joint restaurants, dubbed “dual concept” locations, are increasingly popular in the industry as competitors struggle to cut real estate development costs and make existing properties more appealing to more demanding consumers. CKE officials, for example, believe that the joint venture will bolster overall sales because Carl’s Jr. is more popular with the lunch crowd, while Green Burrito products sell better at dinner time.

PepsiCo Inc. recently announced that its Taco Bell and KFC subsidiaries would blend their menus at about 50 restaurants nationwide. TriarcInc. in New York said last year that it would feature Arby’s roast beef menu items alongside of Long John Silver’s seafood dishes at about 600 restaurants.

Tests of a joint Carl’s Jr./Green Burrito menu at restaurants in Dana Point, Carson and La Quinta “continue to show revenue growth of 30% over the same period a year earlier,” Foley said. “We are enthusiastic about the growth prospects as this project rolls out.”

William M. Theisen, GB Foods’ chairman, also was pleased.

“Everybody wins,” he said. “We have an innovative well-tested Mexican food concept working in concert with the very solid Carl’s Jr. chain which has great market penetration.”

CKE Restaurants operates more than 650 Carl’s Jr. restaurants and is the area franchisee in Southern California and Sacramento for the fast-growing Boston Market restaurant chain. GB Foods has 66 restaurants.

Carl’s Jr.’s stock closed Tuesday at $7.75 a share, unchanged from the previous day’s close on the New York Stock Exchange. GB Foods lost 50 cents a share to close at $10.625 in Nasdaq trading.