Carl's Jr. to be franchised as Restaurant Brands acquires whole chain

The deal with Forsgren, for a total consideration of $10.5 million, will see Restaurant Brands become the sole operator of the premium US burger chain in the New Zealand market and will bring the total number of Carl’s Jr. stores in New Zealand owned by the company to 16. (Forsgren originally launched Carl's Jr. in New Zealand in July 2011, planning to open 25 stores in Auckland before Restaurant Brands acquired the rights for the rest of New Zealand in December that year - Ed.)

Restaurant Brands CEO Russel Creedy says the agreement is for a cash purchase of the seven stores by way of an asset acquisition. Existing Forsgren employees will be offered employment by Restaurant Brands.

'We see the acquisition as a strategic opportunity to add critical mass to our Carl’s Jr. chain and will use the increased scale to further leverage marketing and supply chain opportunities,' says Mr Creedy.

The acquisition is subject to a number of conditions, including approval of CKE Restaurants Holdings, Inc. (CKE), the Carl’s Jr. franchisor, and assignment of leases. Settlement is expected to occur in mid-November.

Restaurant Brands reported a 33.5 percent increase in sales for Carl’s Jr., the company’s newest restaurant chain, in its recent half year result, up $2.2 million to $8.8 million.

Sub-franchising to allow faster growth

In addition to the Forsgren acquisition, Restaurant Brands has also signed a Master Licensing Agreement with CKE which allows Restaurant Brands to sublicense Carl’s Jr. stores in New Zealand to third party franchisees. Restaurant Brands will receive a share of royalties and fees in return for the development and ongoing supervision of sublicensed stores.  

Russel Creedy says the Master Licensing Agreement is effective immediately and allows Restaurant Brands to more quickly increase market penetration.

'Licensing smaller franchisees to operate the Carl’s Jr. brand in locations where they can operate the business effectively will allow more rapid expansion of the Carl’s Jr store network,' says Creedy.

Ned Lyerly, President of CKE’s international division says the US owner of Carl’s Jr. is thrilled by the performance of its brand in New Zealand. 'We believe the transaction between Restaurant Brands and Forsgren, NZ Ltd will create the platform for accelerated growth in the market.  Barry Forsgren and family were the pioneers of our brand entry in New Zealand and they are great ambassadors for Carl’s Jr.  For that we are thankful and look forward to continuing our relationship with their family in American Samoa and other markets.'

'Restaurant Brands’ track record of success in New Zealand speaks for itself and we look forward to partnering with them as they consolidate local brand management under their corporate umbrella and position Carl’s Jr. for accelerated growth in the coming years,' says Lyerly.

Carl’s Jr. is expected to become a major player in the New Zealand burger market, with up to 60 stores opening nationwide.

Carl’s Jr. in New Zealand

July 2011 -  First Carl’s Jr. store opened in Takanini by Forsgren NZ Ltd, a company operated by Barry Forsgren and family.

November 2012 - Restaurant Brands opens first Carl’s Jr store in Mangere.

2014 - 16 Carl’s Jr stores in New Zealand:
Takanini, St Johns, Pukekohe, Lincoln Road, Avondale, Albany, Pakuranga (Forsgren)
Auckland Airport, Mangere, Otahuhu, Queen Street, Hamilton, Hastings Palmerston North, Gisborne, Rotorua (Restaurant Brands)

November 2014 - Restaurant Brands acquires seven stores from Forsgren NZ Ltd and becomes sole operator of Carl’s Jr in New Zealand.