Last week we reported that the creative leaders of the Carl’s Jr. account at 72andSunny will be leaving at the end of the year. More than one source told us that this development stemmed from ongoing disagreement between client and agency regarding the direction of the chain’s famously suggestive ads.
The following day, we received an email sent to “all franchisees and CKE employees” earlier this month by former franchisee Jason LeVecke in which he calls for both the replacement of company CEO Andy Puzder and the end of the distinctive Carl’s Jr. ads. In the note, LeVecke claims the ads are ineffective and that “This type of marketing feeds the very mindset of objectifying women.”
UPDATE: After this post inititally ran, CKE’s PR firm clarified the below regarding the ads that LeVecke included in his email — some of which appeared in Hardee’s franchises located in Pakistan. Their statement:
“In addition, it must be made clear that the images LeVecke submitted with his email to this publication cover three scenarios: in store print posters that a Pakistan franchisee chose himself to display in his restaurants (that didn’t run in any other markets and weren’t developed by CKE’s agency of record 72andSunny), ads that never ran in Pakistan and an image from a spoof video CKE had nothing to do with. For LeVecke to blame Andy Puzder for these ads is misleading and blatantly false.”
CKE’s PR firm responded to related queries with a statement dismissing LeVecke, who is no longer directly associated with CKE and has gone through some recent legal battles with investors after he and his brother filed for corporate and personal bankruptcy last year.
One fact is beyond dispute: LeVecke is the grandson of late CKE founder and namesake Carl Karcher, who was the West Coast equivalent of Ray Kroc.
LeVecke forwarded us the note, which was sent on October 5, after seeing our story about the change in leadership on the Carl’s Jr. account at 72andSunny.
“Enough is Enough,” LeVecke begins. “Over the last several months I have spoken with many of you, both employees and franchisees, regarding the direction of the brand. Overwhelmingly the response has been that there is concern for the future. … CKE needs and deserves new leadership.”
Much of the note calls out Puzder personally: “Its no secret that Andy’s business model is Too Complicated, Too Expensive, Too Slow (slowest service times in the industry), has the highest calorie counts in the industry, and his offensive advertising is shrinking our customer base.”
LeVecke then claims that the racy campaigns do not work as advertised and effectively calls Puzder a sexist whose decisions are hurting the brand, writing, “He makes us all complicit in this degradation of women.” Regarding the ad below, he writes: “Today, in a country like Pakistan where many Women still face the very real fear of being a victim of an honor killing, he runs ad campaigns like the attached that essentially measure the value of a woman by how far she can open her mouth.”
It’s worth noting that these spots have proven controversial among Pakistani consumers.
Coincidentally, Puzder has also been very open about his support for the presidential candidacy of one Donald J. Trump. Over the past few weeks/months, various outlets have reported that Puzder is advising the Republican nominee, and in a blog post published last Friday he argued that “Trump’s economic plan would generate growth and reduce U.S. debt.” Earlier in this election cycle, Puzder got media attention for pledging to explore the automation of some portions of certain locations. This take came in response to promises from Bernie Sanders and Hillary Clinton to raise the nationwide minimum wage.
Here is the full statement sent to us by a CKE representative in response to the note:
“Jason LeVecke is a former franchisee who declared bankruptcy in substantial part due to his real estate dealings, and as a result lost his franchise agreements. He has had numerous suits filed against him, including a fraud suit filed several years ago by his mother and more recently by a number of landlords.
His response has been to make claims ranging from utterly false to completely misleading against the company’s management and, in particular, it’s CEO, Andrew Puzder. The franchise associations for both Carl’s Jr. and Hardee’s have written letters in support of management, and, in fact, at the Carl’s Jr. Franchise Conference last month, Mr. Puzder received an award for being one of the pillars upon which the Carl’s Jr. brand was built. Both Mr. LeVecke and his claims lack any semblance of credibility.”
The company and LeVecke have been at odds for some time. As reported by Franchise Times in May, LeVecke and his brother once owned “80 Hardee’s, 85 Carl’s Jr., 11 Pizza Patron and 22 KFC restaurants.” According to that story, LeVecke’s company filed for bankruptcy just over a year ago amid a sales slump, “lawsuits alleging land fraud,” a suit in which his mother claimed she had been “cheated out of her share of the profits” and an ICE (Immigration and Customs Enforcement) audit which determined that his franchises employed several hundred undocumented immigrants in Arizona.
It’s unclear whether LeVecke has other plans to influence the CKE organization beyond the email in question.
Here are some additional Hardee’s ads that recently ran in the Middle East. LeVecke included them in his note, which we have reprinted in full below.
Friends, Colleagues, Franchisees, and CKE employees,
Enough is Enough. Over the last several months I have spoken with many of you, both employees and franchisees, regarding the direction of the brand. Overwhelmingly the response has been that there is concern for the future. This issue that must be addressed is leadership and for the sake of the brand, particularly the emerging markets, it should no longer be avoided.
CKE needs and deserves new leadership. After 15 years of Andy Puzder’s regime, the brand has the LOWEST average sales volumes on a national basis of all our national and regional competitors and Andy’s business model is creating a dangerous long term proposition.
Its no secret that Andy’s business model is Too Complicated, Too Expensive, Too Slow (slowest service times in the industry), has the highest calorie counts in the industry, and his offensive advertising is shrinking our customer base.
On the subject of advertising, for all of his chest pounding about the effectiveness of his advertising, the numbers simply do not add up. For years he has ignored franchisee concerns over the threat of ever declining customer counts. Almost by definition effective marketing should result in more customers not fewer. Andy’s offensive advertising style has more often resulted in fewer customers than more. And, if the ads were actually effective wouldn’t the competitors be following his lead by now? They aren’t.
Worse, the lack of regard he shows for those that are opposed to or are victimized by the ads is inexcusable. He is willing to go so far that; he objectifies women in some of the most dangerous parts of the world for women. Today, in a country like Pakistan where many Women still face the very real fear of being a victim of an honor killing, he runs ad campaigns like the attached that essentially measure the value of a woman by how far she can open her mouth. This type of marketing feeds the very mindset of objectifying women that make it possible to see a human being as less than one. Andy’s fascination with being the Larry Flynt of our industry may help build his name ID, but it has real world consequences.
Further, He makes us all complicit in this degradation of women. You and I are the “We” in Andy’s quote when he says, “We believe in putting hot models in our commercials because ugly ones don’t sell burgers.” He has made the attached the public and internet image of our brand. And it does not stop there. Andy has been removed from a college board for violating their morality clause. He has caused franchisees to be removed from church, school and college campuses, embarrassed in their own communities. The brand is now boycotted by religious groups, churches, organizations working to stop the sexual exploitation of women, parental groups, and groups working to redefine beauty and build young women’s self-esteem. The list grows every year. Even some of Carl Karcher’s own grandchildren refuse to frequent the brand because of the ads. And our own franchise company was sued by someone claiming Andy’s commercials caused her to be sexually harassed and Andy made us defend and pay for the multiyear lawsuit. I’ve been around long enough to remember the days when we were known for helping improve our communities not degrading them.
Our resulting customer counts are now among the worst in the industry. Over the last 15 years Andy chose to take what was a high volume business and exploit a check raising scheme. He did so over the concerns of franchisees that this would damage the brand in the long term. How much further are we willing to take this? How low can customer counts go before it’s too low? Unfortunately over the years Andy has consistently been successful at muffling dissent. When an employee, franchisee or investor raises concerns, Andy ridicules or threatens them into silence. Franchisees and CKE employees regularly tell me “they are frustrated but they can’t take the risk of speaking up”.
But Andy should not be allowed to escape facts. Today, New Mexico, New Orleans, Las Vegas, Chicago, New York, Dallas, Austin, San Antonio, Oklahoma, Orlando, Ontario and more experience below break even sales volumes with several of these markets at 16-17k a week or worse. In a recent marketing meeting in Texas, CKE’s marketing and operations staff were begging for and even demanding ideas from the franchisees on how best to address the low volumes. Isn’t that what the brand is supposed to be delivering to the franchisee community? If Andy is lost in the wilderness, what exactly are these franchisees paying for? I presume Andy did not inform them before he sold them the franchises, that he did not know how to deliver a successful business model? Sadly, these markets are more likely to find him on his blog or damaging the brand’s image on his twitter account, than see him touring their stores working on solutions. In too many markets he simply hasn’t taken a serious interest in the well being of his franchisees or the brand’s sales volumes. And instead of fixing the model he continues to sucker new franchisees into the system on the same model. When these new franchisees fail it has become all too predictable that CKE under Andy’s leadership will blame the franchisee and disparage their business acumen. Smart people, successful business men and women repeatedly enter the brand and leave. Unfortunately, usually after losing millions of dollars including at times in litigation. Andy never takes responsibility for the failure and each time has an excuse blaming the franchisee. This has to stop. There is only one common denominator to the pattern, it’s Andy. The truth is the “fundamentals” of our business are boring to him. Instead of focusing on the hard work our industry requires he keeps promising the next offensive add will somehow offend enough people to make them visit the restaurants? For Andy Corporate Responsibility may be just a cliché but the brand and its franchisees will continue be the ones to pay the consequences.Many of us have tried to work with Andy. The problem is he is not sincere. He always resorts back to serving himself before others. Enough is enough. We should no longer be quiet or complicit. Our passion for the heritage of this brand may have given us pause to speak out before but should no longer. Unfortunately, if there isn’t a leadership change soon, that Heritage, may be lost forever.I live, work and pray for the day when this brand again has the leadership it deserves. The type of leadership it used to have.
Sincerely,
Jason LeVecke