Carl’s Jr. Parent Whets Its Taste for Mexican Food

CKE Restaurants Inc., the Anaheim-based parent company of the burger chain, in late August agreed to pay $42 million for the 190-unit Taco Bueno chain, which has 109 units, mainly in Texas and Oklahoma. CKE Chairman and Chief Executive William Foley II described the chain as “firmly positioned to take advantage of the burgeoning popularity of Mexican food and the consumer’s request for value.”

But according to a 1991 autobiography penned by Carl’s Jr. founder and Chairman Emeritus Carl N. Karcher, this isn’t the company’s first entry into Texas and Mexican-style food. “If ever there was a combination that seemed made for one another it was the state of Texas and Carl’s Jr.,” Karcher wrote in the 164-page book published to celebrate 50 years in the restaurant business.

Unfortunately for Karcher, the restaurant chain decided to enter Texas during the mid-1980s, just as the state plunged into a severe economic downturn. To make matters worse, Karcher paid too much for land and wasn’t able to finance a television campaign to alert Texans to the chain’s presence.

During late 1985, the Carl’s Jr. chain was losing $1 million a month on the handful of restaurants it opened in and around major Texas cities. By January, 1986, Karcher had made the decision to sell off the Texas restaurants to competitors. A year later, Carl’s Jr. took a $15-million write-down.

“If ever there was a lose-lose situation, this seemed to be it,” Karcher wrote. “We’d moved too quickly before doing our homework.”

Carl’s Jr. also had a brief flirtation with Mexican-style food back in the 1970s, when Karcher opened 17 “Taco de Carlos” locations in Southern California. “The Mexican fast-food portion of the industry was on the rise,” Karcher wrote. “And we wanted to be a part of it.”

Karcher eventually abandoned the Taco de Carlos concept in favor of pumping the chain’s capital into the core burger business.

Greg Johnson covers retail businesses and restaurants for The Times. He can be reached at (714) 966-5950 and at greg.johnson@latimes.com