Regulations Send QSRs Overseas

The owner of Hardee’s and Carl’s Jr. said U.S. rules are making it harder to open new restaurants.

January 03, 2014

ANAHEIM, Calif. – U.S-based fast-food chains are expanding faster in other countries than in America, CNBC reports. The reason? More potential for expansion and profits.

“It's difficult to open in the U.S., but we love the U.S. and continue to fight the good fight to open restaurants and create jobs,” said Andy Puzder, CEO of CKE Restaurants, which owns Carl’s Jr. and Hardee’s. “It's just that the government is making it hard for us to build those restaurants.”

Since 2010, the pair of burger chains has had more locations open overseas than in the United States, the first time that has happened in the company’s history. CKE now has locations in 30 countries, excluding the United States.

“Under the current U.S. business climate, regulatory and tax restrictions tend to curb otherwise dynamic entrepreneurial energy,” he said. “We'd love to see more growth in domestic markets. Unfortunately, it's easier for our franchisees to open a restaurant in Siberia than in California.”

That’s not to say Puzder has given up on the United States. Hardee’s has moved into South Florida, Chicago, New Jersey and New York, while Carl’s Jr. had settled into Seattle and Texas. But the big areas of growth for the company is Brazil, China, Europe, India and Russia. “Other than Antarctica and the North Pole, I can't think of any countries we're not looking at,” he said.

As for the United States, challenges to expansion include ethanol production, which has triggered pricier beef, higher minimum wages and paying more for labor because of the Affordable Health Care Act. To counter increased labor costs, CKE has begun to employ more technology within its restaurants. “I think it satisfies the needs of younger people. It also reduces your costs,” said Puzder. “When they talk about raising the minimum wage or providing health care for employees over 30 hours, you're really encouraging automation.”

Advertisement
Advertisement
Advertisement