As the chairman of CKE, Carl searched for ways to save his company and pay off his debts. He proposed selling Mexican food at Carl’s Jr. restaurants as part of a joint venture with a chain called Green Burrito. But some executives at CKE opposed the plan, arguing that it would benefit Carl much more than the company. Carl had a financial stake in the deal; upon its acceptance by the board of CKE, he would receive a $6 million personal loan from Green Burrito. Carl was outraged that his motives were being questioned and that his business was being run into the ground. CKE now felt like a much different company than the one he’d founded. The new management team had ended the longtime practice of starting every executive meeting with the prayer of St. Francis of Assisi and the pledge of allegiance to the flag. Carl insisted that the Green Burrito plan would work and demanded that the board of directors vote on it. When the board rejected the plan, Carl tried to oust its members. Instead, they ousted him. On March 1, 1993, CKE’s board voted five to two to fire Carl N. Karcher. Only Carl and his son Carl Leo opposed the dismissal. Carl felt deeply betrayed. He had known many of the board members for years; they were old friends; he had made them rich. In a statement released after the firing, Carl described the CKE board as “a bunch of turncoats” and called it “one of the saddest days” of his life. At the age of seventy-six, more than five decades after starting the business, Carl N. Karcher was prevented from entering his own office, and new locks were put on the doors.
The headquarters of CKE is still located on the property where the Heinz family once grew oranges. Today there’s no smell of citrus in the air, no orange groves in sight. In a town that once had endless rows of orange and lemon trees, stretching far as the eye could see, there’s not an acre of them left, not a single acre devoted to commercial citrus growing. Anaheim’s population is now about three hundred thousand, roughly thirty times what it was when Carl first arrived. On the corner where Carl’s Drive-In Barbeque once stood, there’s a strip mall. Near the CKE headquarters on Harbor Boulevard, there’s an Exxon station, a discount mattress store, a Shoe City, a Las Vegas Auto Sales store, and an off-ramp of the Riverside Freeway. The CKE building has a modern, Spanish design, with white columns, red brick arches, and dark plate-glass windows. When I visited recently, it was cool and quiet inside. After passing a life-size wooden statue of St. Francis of Assisi on a stairway landing, I was greeted at the top of the stairs by Carl N. Karcher.
Carl looked like a stylish figure from the big-band era, wearing a brown checked jacket, a white shirt, a brown tie, and jaunty two-tone shoes. He was tall and strong, and seemed in remarkably good shape. The walls of his office were covered with plaques and mementos, with photographs of Carl beside presidents, famous ballplayers, former employees, grandchildren, priests, cardinals, Mikhail Gorbachev, the Pope. Carl proudly removed a framed object from the wall and handed it to me. It was the original receipt for $326, confirming the purchase of his first hot dog cart.
Eight weeks after being locked out of his office in 1993, Carl engineered a takeover of the company. Through a complex series of transactions, a partnership headed by financier William P. Foley II assumed some of Carl’s debts, received much of his stock in return, and took control of CKE. Foley became the new chairman of the board. Carl was named chairman emeritus and got his old office back. Almost all of the executives and directors who had opposed him subsequently left the company. The Green Burrito plan was adopted and proved a success. The new management at CKE seemed to have turned the company around, raising the value of its stock. In July of 1997, CKE purchased Hardee’s for $327 million, thereby becoming the fourth-largest hamburger chain in the United States, joining McDonald’s, Burger King, and Wendy’s at the top. And signs bearing the Carl’s Jr. smiling little star started going up across the United States.
Carl seemed amazed by his own life story as he told it. He’d been married to Margaret for sixty years. He’d lived in the same Anaheim house for almost fifty years. He had twenty granddaughters and twenty grandsons. For a man of eighty, he had an impressive memory, quickly rattling off names, dates, and addresses from half a century ago. He exuded the genial optimism and good humor of his old friend Ronald Reagan. “My whole philosophy is — never give up,” Carl told me. “The word ‘can’t’ should not exist… Have a great attitude… Watch the pennies and the dollars will take care of themselves… Life is beautiful, life is fantastic, and that is how I feel about every day of my life.” Despite CKE’s expansion, Carl remained millions of dollars in debt. He’d secured new loans to pay off the old ones. During the worst of his financial troubles, advisers pleaded with him to declare bankruptcy. Carl refused; he’d borrowed more than $8 million from family members and friends, and he would not walk away from his obligations. Every weekday he was attending Mass at six o’clock in the morning and getting to the office by seven. “My goal in the next two years,” he said, “is to pay off all my debts.”
I looked out the window and asked how he felt driving through Anaheim today, with its fast food restaurants, subdivisions, and strip malls. “Well, to be frank about it,” he said, “I couldn’t be happier.” Thinking that he’d misunderstood the question, I rephrased it, asking if he ever missed the old Anaheim, the ranches and citrus groves.
“No,” he answered. “I believe in Progress.”
Carl grew up on a farm without running water or electricity. He’d escaped a hard rural life. The view outside his office window was not disturbing to him, I realized. It was a mark of success.
“When I first met my wife,” Carl said, “this road here was gravel and now it’s blacktop.”
2/your trusted friends
BEFORE ENTERING the Ray A. Kroc Museum, you have to walk through McStore. Both sit on the ground floor of McDonald’s corporate headquarters, located at One McDonald’s Plaza in Oak Brook, Illinois. The headquarters building has oval windows and a gray concrete façade — a look that must have seemed space-age when the building opened three decades ago. Now it seems stolid and drab, an architectural relic of the Nixon era. It resembles the American embassy compounds that always used to attract antiwar protesters, student demonstrators, flag burners. The eighty-acre campus of Hamburger University, McDonald’s managerial training center, is a short drive from headquarters. Shuttle buses constantly go back and forth between the campus and McDonald’s Plaza, ferrying clean-cut young men and women in khakis who’ve come to study for their “Degree in Hamburgerology.” The course lasts two weeks and trains a few thousand managers, executives, and franchisees each year. Students from out of town stay at the Hyatt on the McDonald’s campus. Most of the classes are devoted to personnel issues, teaching lessons in teamwork and employee motivation, promoting “a common McDonald’s language” and “a common McDonald’s culture.” Three flagpoles stand in front of McDonald’s Plaza, the heart of the hamburger empire. One flies the Stars and Stripes, another flies the Illinois state flag, and the third flies a bright red flag with golden arches.
You can buy bean-bag McBurglar dolls at McStore, telephones shaped like french fries, ties, clocks, key chains, golf bags and duffel bags, jewelry, baby clothes, lunch boxes, mouse pads, leather jackets, postcards, toy trucks, and much more, all of it bearing the stamp of McDonald’s. You can buy T-shirts decorated with a new version of the American flag. The fifty white stars have been replaced by a pair of golden arches.