CKE Restaurants Signs Agreement to Bring 100 Carl's Jr. Restaurants To China
Jun 16, 2008
CARPINTERIA, Calif. – June 18, 2008 – CKE Restaurants, Inc. (NYSE: CKR) announced today its subsidiary, Carl Karcher Enterprises, Inc., has signed an agreement to open a minimum of 100 Carl's Jr. restaurants in the People's Republic of China over the next eight years. The deal will bring SGX-listed BreadTalk Group Limited, a leading lifestyle Food and Beverage group, and Aspac F&B International Pte Ltd together with CKE, granting franchise rights for the Carl's Jr. brand in the municipalities of Beijing, Shanghai and Tianjin, as well as the provinces of Zhejiang and Jiangsu in China.
This agreement is part of CKE Restaurants' overall strategic plan to accelerate franchise development in international markets. Today's agreement represents the first phase in CKE's expansion effort to develop Carl's Jr. restaurants throughout the People's Republic of China. Currently, CKE franchises 294 international units between both its Carl's Jr. and Hardee's®brands. CKE is expected to open its 300th international restaurant during the second quarter of the current fiscal year.
Aspac is currently a successful Carl's Jr. licensee in Singapore and Malaysia operating 10 Carl's Jr. restaurants. BreadTalk has a network of 199 bakery outlets, with 83 company owned outlets in Singapore, PRC, Hong Kong, Malaysia and Thailand, and 116 franchised outlets across Asia and the Middle East. BreadTalk also owns and operates five world-renowned Din Tai Fung restaurants in Singapore, as well as 27 award-winning Megabite/Food Republic food atria in Singapore, PRC, Hong Kong and Malaysia.
"We are pleased to announce this agreement and our new partnership with BreadTalk and to expand our successful relationship with Aspac," said Andrew F. Puzder, president and chief executive officer of CKE Restaurants, Inc. "This is a very exciting development for our company. The People's Republic of China represents a tremendous growth opportunity. The strength of our brand matched with Aspac's operating experience with Carl's Jr. in Singapore and Malaysia, along with the BreadTalk Group's local market knowledge and operating experience gives us confidence that we have a bright future in the market. This agreement and the agreements we announced yesterday for the Pakistan market serve to emphasize our company's continuing commitment to international growth and development."
According to Dr. George Quek, chairman of BreadTalk Group "The average consumer in China's first line cities, having been exposed to a varied offering of Western fast food is now primed for more discerning menu items such as premium burgers. In this regard, BreadTalk Group is pleased to partner with CKE Restaurants, Inc. and Aspac in introducing a premium gourmet U.S. burger chain, Carl's Jr., into Beijing and Shanghai. The experience and track record of the BreadTalk Group in the PRC would facilitate the rollout and reach of Carl's Jr. outlets. We are confident that the Carl's Jr. brand will find ready acceptance after the first stores are opened in Beijing and Shanghai respectively before March 2009."
Richard Tan, chairman of Aspac F&B International Pte. Ltd., added, "In the last five years or so, we have seen a significant rise in the demand for overseas premier brands in the quick-serve industry due to irreversible rising consumerism and economic conditions. After studying the market, conducting our due diligence and sourcing the right partner, Aspac is very excited to partner with CKE Restaurants, Inc. and the BreadTalk Group to roll out Carl's Jr. as the leading premium burger brand in the territories of Beijing and Shanghai. Our very successful launch of the Carl's Jr. brand in Singapore and Malaysia over the past three years has proven the attractiveness of the brand's product offering and premium brand positioning to consumers between the ages of 18 and 35 years in these rising Asian countries."
About CKE Restaurants, Inc.
Headquartered in Carpinteria, California, CKE Restaurants, Inc. is publicly traded on the New York Stock Exchange under the symbol "CKR". As of its fiscal 2008 fourth quarter ended Jan. 28, 2008, CKE Restaurants, Inc., through its subsidiaries, had a total of 3,067 franchised, licensed or company-operated restaurants in 42 states and in 13 countries, including 1,141 Carl's Jr. restaurants and 1,926 Hardee's restaurants. For more information about CKE Restaurants, please go to www.ckr.com.
About BreadTalk Group Limited
Founded as an F&B operator in Singapore in 2000 and listed on the SGX in 2003, BreadTalk has rapidly expanded to become a distinctive household brand owner that has established its mark on the world stage with its bakery, restaurant and food atrium footprints. Its brand portfolio comprises of BreadTalk, ToastBox, Food Republic, Din Tai Fung and J Co. With global staff strength in excess of 2,000 employees across 12 countries, the Group has a network of 199 bakery outlets, with 83 company owned outlets in Singapore, PRC, Malaysia, Hong Kong and Thailand, and 116 franchised outlets across Asia and the Middle East. It also owns and operates 5 world-renowned Din Tai Fung restaurants in Singapore, as well as 27 award-winning Megabite / Food Republic food atria in Singapore, PRC, Hong Kong and Malaysia.
About Aspac F&B International Pte. Ltd.
Aspac F&B International Pte. Ltd. is a subsidiary of Fong Tat Group Pte. Ltd. The Fong Tat group, headquartered in Singapore, is a diversified group with core interests in auto parts distribution, property development and food and beverage ventures in the region. It currently holds the Master License rights to develop Carl's Jr. restaurants in the territories of Singapore and Malaysia via Aspac F&B Pte. Ltd.
SAFE HARBOR DISCLOSURE
Matters discussed in this news release contain forward-looking statements relating to future plans and developments, financial goals and operating performance that are based on management's current beliefs and assumptions. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond the Company's control and which may cause results to differ materially from expectations. Factors that could cause the Company's results to differ materially from those described include, but are not limited to, whether or not restaurants will be closed and the number of restaurant closures, consumers' concerns or adverse publicity regarding the Company's products, the effectiveness of operating initiatives and advertising and promotional efforts (particularly at the Hardee's brand), changes in economic conditions or prevailing interest rates, changes in the price or availability of commodities, availability and cost of energy, workers' compensation and general liability premiums and claims experience, changes in the Company's suppliers' ability to provide quality and timely products to the Company, delays in opening new restaurants or completing remodels, severe weather conditions, the operational and financial success of the Company's franchisees, franchisees' willingness to participate in the Company's strategies, the availability of financing for the Company and its franchisees, unfavorable outcomes in litigation, changes in accounting policies and practices, effectiveness of internal controls over financial reporting, new legislation or government regulation (including environmental laws), the availability of suitable locations and terms for the sites designated for development, and other factors as discussed in the Company's filings with the Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law or the rules of the New York Stock Exchange.
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