Investor Presentation - PDF Free Download

Investor Presentation October, 2008 Andrew F. Puzder, President & CEO Ted Abajian, EVP and CFO

CKE Restaurants, Inc. (NYSE: CKR) DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS Matters discussed in this presentation contain forward-looking statements relating to future plans and developments, financial goals, and operating performance and are based on management s current beliefs and assumptions. Such statements are subject to risks and uncertainties that are often difficult to predict and beyond our control. Factors that could cause the Company s results to differ materially from those described include, but are not limited to, anticipated and unanticipated restaurant closures for the Company and its franchisees, whether or not restaurants will be closed and the number of restaurant closures, consumers concerns or adverse publicity regarding the Company s products, effectiveness of operating initiatives and advertising and promotional efforts (particularly at the Hardee s brand), changes in economic conditions, changes in the price or availability of commodities, availability and cost of energy, workers compensation and general liability premiums and claim 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 our strategy, availability of financing for the Company and its franchisees, unfavorable outcomes on litigation, changes in accounting policies and practices, new legislation or government regulation (including environmental laws), the availability of suitable locations and terms for the sites designed 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. 2

Who Are We? Carl s Jr. 1,100+ unit chain based mainly in Western U.S. and Mexico Signature Products Six Dollar Burger and Western Bacon Cheeseburger Hardee s 1,900+ unit chain based in Midwest and Southeast U.S. and Middle East Signature Products Thickburger and Made From Scratch Biscuits Industry Leader with Innovative, Premium Product Strategy and Cutting-Edge Advertising Dual-Branding of Green Burrito and Red Burrito Mexican-Style Menu Within Carl s Jr. and Hardee s Locations 3

Why Invest in CKE? Core Strengths That Will Sustain Our Brands Through Difficult Economic Conditions Avoiding the Falling Knives for Investors Limited Business Risk in Key Areas Open and Regular Communication with Investors 4

1. Core Strengths That Will Sustain Our Brands Through Difficult Economic Conditions 5

Fast Food is Not a Luxury Item People are going to continue eating People are going to continue eating fast food QSR has done well in prior economic downturns Carl s Jr. and Hardee s are now recognized for serving casual dining quality products at fast food prices Competitive advantage as consumers have less disposable income 6

Carl s Jr./QSR Same-store Sales History 10% 8% Dot-com bubble 9/11 Iraq War Begins 7.7% Hurricane Katrina Subprime Mortgage Crisis 6% 4% 2% 0% 4.8% 2.1% 3.0% 3.0% 4.0% 1.8% 0.8% 2.9% 1.2% 2.9% 0.7% 0.3% 0.2% 5.6% 2.2% 2.1% 4.9% 3.6% 3.9% 3.4% 1.9% 0.9% -2% -3.0% -4% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2008 Carl's Jr QSR QSR segment includes: BKC, JBX,MCD and WEN. 7

Cravable, Innovative Products Our premium, innovative products are second to none and copied by most. Western Bacon Cheeseburger 8

Cravable, Innovative Products Ability to Adjust Our Menu For Changes In Consumer Tastes And Spending Levels Guacamole Bacon Six Dollar Burger Pork Chop N Gravy Biscuit Monster Breakfast Sandwich Banana Cream Pie Shake w/ NILLA Wafers Frisco Thickburger 9

Cravable, Innovative Products Low- and mid-priced items focused on both sales and profitability Little Thickburger Famous Star Double Cheeseburger Jumbo Chili Dog 10

Food Focused, Cutting-Edge Advertising Aspirational Young Hungry Guy Target Supports Our Image 11

High-Quality/Reasonable Price Strategy Able to Compete with Fast Food Competitors and Draw Customers From Higher-priced, Comparable Quality Casual Dining Restaurants Natural Cut Fries Prime Rib Burger Six Dollar Burger 12

Reasonable Pricing Structure Protects Profits Avoiding Deep Discounting / Low Margin Promotions Reasonable Price Increases Over Time Have Allowed Us to Adjust for Changes in Commodity, Labor, and Energy Costs % of Company-Operated Revenue 83.0% 81.0% 79.0% 77.0% 190 bp increase 30 bp increase 80 bp decrease 160 bp increase 79.7% 81.6% 80.3% 81.9% 79.8% 80.1% 81.5% 80.7% 75.0% Q3 FY'07 Q3 FY'08 Q4 FY'07 Q4 FY'08 Q1 FY'08 Q1 FY'09 Q2 FY'08 Q2 FY'09 13

Carl s Jr. Restaurant Operating Costs % of Company-Operated Revenue 81.0% 79.0% 77.0% 80.6% 80.1% 79.0% 79.8% 78.9% 76.6% 76.3% 3 rd best since FY 2001 78.5% 78.3% 75.0% FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 YTD FY 2009 14

Hardee s Restaurant Operating Costs 93.0% 92.5% % of Company-Operated Revenue 91.0% 89.0% 87.0% 85.0% 83.0% 90.4% 89.5% 90.7% 85.7% 84.5% 81.9% 83.6% 2 nd best since FY 2001 82.8% 81.0% FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 YTD FY 2009 15

Focus on Operational Cost Structure Company Rest Op Expense as % of Revenue 89% 87% 85% 83% 81% 79% 77% 75% $1,527 79.6% 79.3% $973 83.3% 82.4% $1,207 81.5% 80.7% $1,301 87.8% 84.2% $1,430 83.3% 82.6% $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Company-operated AUV ($in thousands) Carl's Jr. Hardee's CKE BKC JBX 07 Rest Op Exp 08 Rest Op Exp AUV Restaurant operating expenses for most recent quarter. BKC average unit volume includes worldwide company-operated and franchised units. JBX average unit volume for company-operated stores as of FYE 2007 (Sept.) 16

Same-Store Sales History 8% 6% 4% Year-over-Year SSS 2% 0% -2% -4% -6% -8% FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Carl's Jr. Hardee's YTD FY09 17

Average Unit Volume History $1,560 $1,460 $1,527 $976 $1,000 $950 Carl's Jr. AUV ($ in 000's) $1,360 $1,260 $1,160 $900 $850 $800 Hardee's AUV ($ in 000's) $1,060 $750 $960 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 P8 FY09 Carl's Jr. Hardee's $700 18

Average Unit Volumes for QSR Burger Chains (2007) $2,200 $2,075 $2,000 $1,800 DOLLARS (in thousands) $1,600 $1,400 $1,200 $1,000 $1,493 $1,430 $1,422 $1,250 $1,162 $1,109 $954 $800 $600 McDonald's Carl's Jr. Jack in the Box Wendy's Burger King CKE Sonic Hardee's 19

Increase in AUV, 2000-2007 by Percentage and Dollars 55% 50% 48% 45% 40% 35% 38% 33% 33% 36% AUV Increase 30% 25% 20% 16% 15% 10% 5% 0% 11% $362 $415 $239 $517 $199 $124 $108 8% 7% $ in thousands. Sonic Carl's Jr. Hardee's McDonald's Jack in the Box Burger King Wendy's CKE 20

2. Avoiding the Falling Knives for Investors Limited Business Risk in Key Areas 21

Strong Balance Sheet, Limited Maturities and Modest Leverage $253 million term loan with minimal maturities through 2011 Total Bank and Other Long-term Debt - $328.4 million, down from $351.1 million at FYE 2008 (a) Trailing 13-Period Adjusted EBITDA - $167.9 million Total Debt/Adjusted EBITDA 2.2x Leverage Ratio Covenants 3.0x at FYE 2009, 2.75x at FYE 2010 (a) Includes $15.2 million of convertible debt callable on Oct. 1, 2008. 22

Excellent Credit Facility $253 million term loan & $200 million revolver Pricing significantly below market Term Loan Interest Rate LIBOR + 1 3/8% $200 million of term loan fixed at 6.1231% $105 million of liquidity available under revolver (expires 2012) Revolver Interest rate LIBOR + 1 ½% Strong Syndicate of Lenders Primary Lenders BNP Paribas, Bank of America, Wells Fargo, Citigroup, JPMorgan, Rabobank, Union Bank of California, US Bank, First Bank, Royal Bank of Canada 23

Avoiding the Herd Mentality at a time when fast-food giants have broadened their offerings of salad and other lower-calorie fare, (Hardee s Monster Thickburger has) enough calories to make Ronald McDonald blush. -AP McDonald's to give away free chicken sandwiches -AP, May 6, 2008 Jack in the Box Restaurants to Offer Two Free Tacos to Guests -Corporate release, June 20, 2008 Million (Double Stack) Coupon Giveaway Planned -Wendy s corporate release, Aug. 29, 2008 24

Transitioning to Larger Franchise Base 2,400 51.5% 2,200 50% 2,000 1,917 Company-operated Units 1,800 1,600 1,400 1,200 1,000 800 600 38.9% 1,414 35.3% 36.4% 36.7% 36.3% 35.9% 36.4% 31.5% 1,185 1,170 1,147 1,105 1,091 1,089 966 29.4% 920 40% 30% 20% % of Total Units 400 10% 200 0 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY'09 GOAL Company Operated Units % of Total Units 0% 25

Refranchising As A Means To Transition to Larger Franchise Base 136 Hardee s restaurants refranchised in Fiscal 2008 28 stores refranchised in Q1 FY 2008 18 stores in Q2 FY 2008 60 stores in Q3 FY 2008 30 stores in Q4 FY 2008 88 stores refranchised in FY 2009 59 refranchised in Q1 FY 2009 6 refranchised in Q2 FY 09 23 stores refranchised subsequent to Q2 FY 09 11 additional units targeted for refranchising Total 235 units 26

Refranchising As A Means To Transition to larger Franchise Base Why Refranchise? Reduce Capital Requirement $51 Million in Remodel and R&M Capex Shifted to Franchisees More Stable Income Stream Place Underpenetrated/Underperforming Markets in the Hands of Franchisees Franchisees Commit to Development Agreements in Markets Where We Would Not Build Less Vulnerable to Operating Cost Increases Why Own? Higher Earnings and Cash Flow Keep Control of System Greater Benefit When Costs Decline 27

Domestic Growth Opportunity 15,000 13,862 12,000 9,000 Units 6,000 7,482 5,936 3,000 2,785 0 MCD BKC WEN CKE Unit count as of December 31, 2007 for MCD, BKC and WEN and January 28,2008 for CKE. BKC includes US and Canada. 28

Domestic Franchise New Unit Growth As A Means To Transition To A Larger Franchise Base Units 100 90 80 70 60 50 40 30 20 10 0 48 13 Carl s Jr. 45 19 69 20 33 GOAL 77 20 37 18 29 14 19 16 20 11 8 15 13 6 7 6 4 7 7 FY 2006 FY 2007 FY 2008 FY'09 GOAL 30 25 FY 2006 FY 2007 FY 2008 FY'09 GOAL Company-Operated Domestic Franchised International Franchised 35 Hardee s 26 52 GOAL 45 29

Domestic Franchise New Unit Growth As A Means To Transition To A Larger Franchise Base 71 domestic units opened during Fiscal 2008 87% increase from Fiscal 2007 161 restaurants opened in the past three years Franchised units represent > 70% of overall new restaurant openings Focus on existing Carl s Jr. and Hardee s markets with emphasis on California, Georgia and Florida Carl s Jr. New Markets Seattle, San Antonio and Austin Carl s Jr. Target Markets Dallas and Houston 257 new unit commitments under development agreements through Fiscal 2014 3-5% annual domestic unit growth 30

Domestic Franchise Development Goals Units 110 100 90 80 70 60 50 50 6 60 8 70 22 80 90 32 50 100 75 40 30 20 44 52 48 48 40 10 25 0 FY '09 GOAL FY '10 GOAL FY '11 GOAL FY '12 GOAL FY '13 GOAL FY '14 GOAL Existing Commitments New Development 31

International Growth New agreements signed to build 100 units in China and 25 units in Pakistan in the next seven years Openings to commence next year Target markets Australia, Canada, Europe, Japan, Latin America, Turkey Current markets Middle East (192), Mexico(99), Russia (8), Southeast Asia(10), American Samoa (1) 50 international units opened during FY 2008 300 th international unit opened last month 310 units open as of Sept. 29 Currently signed development agreements and development from existing franchisees could grow international unit base to 600+ units by FY 2013 32

International Growth Opportunity 18,000 17,515 15,000 14,341 12,000 Units 9,000 6,000 3,913 3,000 0 MCD YUM BKC WEN CKE 709 310 Unit count as of December 31, 2007 for MCD, BKC and WEN and September 29,2008 for CKE. 33

International Franchise Development Goals 140 120 126 139 Units 100 80 60 40 20 0 96 78 60 109 133 45 79 59 36 25 20 24 19 17 17 6 FY '09 GOAL FY '10 GOAL FY '11 GOAL FY '12 GOAL FY '13 GOAL FY '14 GOAL Existing Commitments New Development 34

AcrobatDocument Existing International Presence Russia 8 Mexico 99 Middle East 192 Singapore/ Malaysia 10 Pago Pago 1 35

AcrobatDocument Targeted International Markets Signed Agreements Primary Targets Secondary Targets 36

Systemwide Unit Count Goals By 2014: Approximately 75% of our system will be franchised 20% of units will be international versus 9% currently 4,500 4,000 3,500 3,000 31.5% of Total Units Company-Operated 3,067 3,132 282 325 3,279 385 3,455 463 3,661 559 3,909 685 25.7% 4,185 824 Units 2,500 2,000 1,819 1,887 1,947 2,017 2,097 2,187 2,287 1,500 1,000 500 966 920 947 975 1,005 1,037 1,074 0 FY 2008 FY09 GOAL FY10 GOAL FY11 GOAL FY12 GOAL FY13 GOAL FY14 GOAL 37 Company Operated Domestic Franchise International

Investing in Our Infrastructure to Protect Our Short and Long-Term Viability Remodel Summary 195 Carl s Jr. units remodeled through Q2 FY 09 18% of total domestic unit base 185 company-operated units 45% of company-operated unit base 11 franchise units 2% of domestic franchise base 163 Hardee s units remodeled through Q2 FY 09 9% of total domestic unit base 131 company-operated units 24% of company-operated units base 32 franchise units 2% of domestic franchise base 38

Remodel Schedule 150 125 119 100 Carl s Jr. Goal - 100 81 100 100 90 Units 75 Hardee s Goal - 75 50 35 50 50 50 25 0 1 FY 2007 FY 2008 FY'09 GOAL FY'10 GOAL FY'11 GOAL Carl's Jr. Hardee's 39

Exterior Remodels 40

Exterior Remodels 41

CKE Restaurants, Inc. Capital Plan Current Capital Plan represents an $86.6 million reduction in planned expenditures from original Capital Plan Reductions from refranchising, slowing of planned new unit growth, and slowing of remodel program Under the current Capital Plan, 50% of planned spending is discretionary Can eliminate or reduce such spending on short notice as we deem prudent While remodels are non-discretionary, we can slow the process on short notice as we deem prudent We do not intend to borrow monies to complete our Capital Plan Bank debt reduced by approximately $25 Million YTD while proceeding with our Capital Plan 42

CKE Restaurants, Inc. Capital Plan FY 07 FY 11 FY 09 FY 11 Forecast ($ in millions) Carl's Jr. Hardee's Total Non-Discretionary Remodels $30.6 $62.4 $93.0 Repair/Maint. 32.3 30.9 63.2 IT/Dist. Center/Corporate 10.8 10.7 21.5 Subtotal 73.7 104.0 177.7 Discretionary New Units $103.0 $39.4 $142.4 Dual-branding 4.2 12.9 17.1 Contingency 8.5 8.5 17.0 Subtotal 115.7 60.8 176.5 Total Capital Expenditures $189.4 $164.8 $354.2 43

We closely monitor the results of new restaurant openings, refranchising efforts, same-store sales improvements, operating expense reductions and G&A expense reductions to assure a net positive impact to our business and profitability. 44

Adjusted EBITDA Q2 FY 08 Bridge to Q2 FY 09 Q2 FY 08 Adjusted EBITDA $ 38,992 Net increase / (decrease) in Adjusted EBITDA resulting from: Changes in Store count Restaurants that closed in FY 08 and FY 09 (1) (171) Sale of La Salsa in FY 08 (2) (224) Net impact of refranchising program (3) (2,925) New restaurants that opened in FY 08 and FY 09 (4) 722 Increased franchise contribution - domestic and international (5) 643 Changes in Operating Results 3.6% blended same-store sales increase 2,111 Same-store operating cost decrease 1,375 G&A decreases and all other 496 Q2 FY 09 Adjusted EBITDA $ 41,018 Increase in Q2 FY 09 Adjusted EBITDA $ 2,026 (1) 15 and 11 store closures in FY 08 and FY 09, respectively. (2) La Salsa was sold on July 16, 2007. (3) 136 Hardee's units in FY 08, 65 Hardee s units and 3 Carl s Jr. units in Q2 FY 09 to date. (4) 23 new units in FY 08 & 8 new units in Q2 FY 09 to date. (5) Excludes impact of refranchising activities. 45

Adjusted EBITDA 1H FY 08 Bridge to 1H FY 09 1H FY 08 Adjusted EBITDA $ 92,668 Net increase / (decrease) in Adjusted EBITDA resulting from: Changes in Store count Restaurants that closed in FY 08 and FY 09 (1) (368) Sale of La Salsa in FY 08 (2) (426) Net impact of refranchising program (3) (5,034) New restaurants that opened in FY 08 and FY 09 (4) 2,561 Increased franchise contribution - domestic and international (5) 330 Changes in Operating Results 2.6% blended same-store sales increase 4,041 Same-store operating cost increase (55) G&A decreases and all other 1,914 1H FY 09 Adjusted EBITDA $ 95,631 Increase in 1H FY 09 Adjusted EBITDA $ 2,963 (1) 15 and 11 store closures in FY 08 and FY 09, respectively. (2) La Salsa was sold on July 16, 2007. (3) 136 Hardee's units in FY 08, 65 Hardee s units and 3 Carl s Jr. units in Q2 FY 09 to date. (4) 23 new units in FY 08 & 8 new units in Q2 FY 09 to date. (5) Excludes impact of refranchising activities. 46

EPS Growth (continuing operations) $1.00 $0.80 $0.60 $0.40 $0.39 $0.49* $0.77 $0.57 $0.65 $0.20 $0.00 -$0.20 -$0.40 -$0.26 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 TTM FY 2009 Note: FY 2004-2005 EPS figures reflect de minimums taxes due to the company s valuation allowance for deferred tax assets. FY 2006 EPS has been recalculated to reflect a 40% effective tax rate. Actual FY 2006 EPS was $2.54 and includes a $148.0 million income tax benefit. 47

Annual Adjusted EBITDA $195 $ (in millions) $180 $165 $150 $135 $144.1 $152.4 $181.1 $164.9 $167.9 $120 $115.9 $105 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 TTP FY 2009 Note: In compliance with the Company s credit facility, Fiscal 2007 and all periods thereafter, include an addition to earnings for share-based compensation. 48

EBIT Growth (continuing operations) $120 $108.0 $ (in millions) $100 $80 $60 $40 $28.8 $60.4 $82.7 $92.8 $91.2 $20 $0 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 TTM FY 2009 49

Diluted Shares Outstanding 75 73.25 72.38 70 Diluted Shares (in millions) 65 60 55 58.12 57.54 59.58 62.60 54.38 50 50.50 50.51 45 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Q2 FY09 50

3. Open and Regular Communications with investors 51

Regular Communication With Shareholders To help reduce information risk with our shareholders, we will continue to: Release our period same store sales and revenue numbers each period Meet in person and telephonically with our investors and analysts as requested and at equity conferences Forecast our operating expenses in the final period same store sales release we issue for each quarter Hold our quarterly earnings release conference calls with open Q&A 52

Summary Core Strengths That Will Sustain Our Brands Through Difficult Economic Conditions Avoiding the Falling Knives for Investors Limited Business Risk in Key Areas Open and Regular Communication with Investors 53

Investor Presentation Appendix October, 2008 54

Domestic Presence 7 12 3 7 6 12 4 361 38 359 37 1 9 1 27 7 64 4 45 17 7 3 11 40 1 24 59 50 56 27 52 24 74 5 1 10 12 60 8 13 74 3 88 63 39 24 16 38 184 60 175 106 35 10 14 17 3 33 88 68 47 41 Carl's Jr. Company-Operated. Hardee s Company-Operated Carl's Jr. Franchised Hardee s Franchised 55

Carl s Jr. (Q2 FY 2009)* 1,170 stores (408 company-operated, operated, 762 franchised and licensed) AUVs of $1.527 million as of P8 FY 09 89.0% of company-operated operated restaurants generating $1.0 million or greater in revenue Average guest check of $7.10 421 dual-branded restaurants with Green Burrito (200 company-operated) operated) Company-operated operated AUVs of $1.56 million as of FY 08 Restaurant operating costs of 79.3% in Q1 FY 09 versus 79.6 in Q1 FY 08 * Company-operated operated restaurants 56

Carl s Jr. Cumulative Two-Year Same Store-Sales 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% P9 FY'08 P10 FY'08 P11 FY'08 P12 FY'08 P13 FY'08 P1 FY'09 P2 FY'09 P3 FY'09 P4 FY'09 P5 FY'09 P6 FY'09 P7 FY'09 P8 FY'09 Carl's Jr. 6.1% 5.4% 3.0% 8.3% 0.8% -1.3% 7.2% 6.0% 3.3% 5.3% 8.0% 4.2% 1.1% 57

Carl s Jr. Year-over-Year Same Store-Sales 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% P9 FY'08 P10 FY'08 P11 FY'08 P12 FY'08 P13 FY'08 P1 FY'09 P2 FY'09 P3 FY'09 P4 FY'09 P5 FY'09 P6 FY'09 P7 FY'09 P8 FY'09 Carl's Jr. -1.1% 2.0% 2.5% 2.7% -1.3% 1.4% 6.0% 3.8% 4.2% 2.5% 4.9% 4.2% -0.1% 58

Carl's Jr. Company-Owned Restaurants 52-Week Moving Average Unit Volume $29,500 $29,000 $28,500 $28,000 $27,500 $27,000 $26,500 $26,000 $25,500 $25,000 $24,500 $24,000 59 8/18/03 11/17/03 2/16/04 5/17/04 8/16/04 11/15/04 2/14/05 5/16/05 8/15/05 11/14/05 2/13/06 5/15/06 8/14/06 11/13/06 2/12/07 5/14/07 8/13/07 11/12/07 2/11/08 5/12/08 8/11/08 Week Ending Notes: Historical data, except for the last four weeks, included data for recently closed and/or divested restaurants Weekly AUV ($)

Hardee s (Q2 FY 2009)* 1,917 stores (519 company-operated, operated, 1,398 franchised and licensed) AUVs of $976K as of P8 FY 09 41.3% of company-operated operated and 35.4% of franchised restaurants generating $1.0 million or greater in revenue Average guest check of $5.30 98 dual-branded restaurants with Red Burrito (80 company- operated, 18 franchised) Restaurant operating costs of 82.4% in Q2 FY 09 versus 83.3% in Q2 FY 08 * Company-operated operated restaurants 60

Hardee s Cumulative Two-Year Same Store-Sales 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% P9 FY'08 P10 FY'08 P11 FY'08 P12 FY'08 P13 FY'08 P1 FY'09 P2 FY'09 P3 FY'09 P4 FY'09 P5 FY'09 P6 FY'09 P7 FY'09 P8 FY'09 Hardee's 8.9% 7.0% 8.4% 8.7% -1.8% 3.1% 0.8% 1.6% -0.4% 5.4% 6.8% 6.4% 4.6% 61

Hardee s Year-over-Year Same Store-Sales 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% P9 FY'08 P10 FY'08 P11 FY'08 P12 FY'08 P13 FY'08 P1 FY'09 P2 FY'09 P3 FY'09 P4 FY'09 P5 FY'09 P6 FY'09 P7 FY'09 P8 FY'09 Hardee's 1.3% 3.6% 3.2% -0.6% -1.8% 1.6% -2.1% -0.8% -1.0% 2.8% 5.7% 1.4% 1.1% 62

Hardee's Company-Owned Restaurants 52-Week Moving Average Unit Volume $19,000 $18,750 $18,500 $18,250 $18,000 $17,750 $17,500 $17,250 $17,000 $16,750 $16,500 $16,250 $16,000 $15,750 $15,500 $15,250 $15,000 63 8/18/03 11/17/03 2/16/04 5/17/04 8/16/04 11/15/04 2/14/05 5/16/05 8/15/05 11/14/05 2/13/06 5/15/06 8/14/06 11/13/06 2/12/07 5/14/07 8/13/07 11/12/07 2/11/08 5/12/08 8/11/08 Week Ending Notes: Historical data, except for the last four weeks, includes data for recently closed and/or divested restaurants Weekly AUV ($)

Remodel Carl s Jr. Exterior 64

Remodel Carl s Jr. Interior 65

Remodel Hardee s Exterior 66

Refranchising Impact Average unit-level metrics for refranchised store base Average unit volume (AUV) - $848,000 Restaurant operating costs 84.8% of revenue Store-level cash flow - $92,000, or 10.9% of revenue (includes advertising and field G&A costs) 67

Refranchising Impact Cash Flow Impact ($ per unit) Decrease in Company-operated Cash Flow Increase in Royalty Income ($848k x 4%) Net Decrease in Cash Flow ($92,000) $34,000 ($58,000) A Capital Expenditures ($ per unit) Decrease in Ongoing Capital Expenditures Decrease in Remodel Capital Expenditures ($175,000 remodel cost over 5-year cycle) Decrease in Capital Expenditures $15,000 $35,000 $50,000 B Theoretical Annual Cash Interest Savings Based on Average Cash Proceeds of $390k per Unit @ 6.2% $24,180 C Estimated Annual Increase in Free Cash Flow Per Store (A+B+C) $16,180 68

Adjusted EBITDA - FY 07 Bridge to FY 08 FY 07 Adjusted EBITDA $ 181,154 Net increase / (decrease) in Adjusted EBITDA resulting from: Changes in Store count Restaurants that closed in FY 07 and FY 08 (1) (425) Sale of La Salsa in FY 08 (2) (3,279) Net impact of refranchising program (3) (3,481) New restaurants that opened in FY 07 and FY 08 (4) 3,772 Changes in Operating Results 1.5% blended same-store sales increase 5,701 Same-store food & packaging cost increase (80 basis points) (9,009) Same-store labor and other operating cost increase (110 basis points) (14,238) General & administrative expense reduction and all other (5) 4,213 } $ (23,247) Unusual Items Conversion inducement expense recognized in FY 07 6,406 Decrease in collection of previously unrecognized revenue from franchisees (4,385) Relocation of the Carl's Jr. distribution center in FY 08 (1,488) FY 08 Adjusted EBITDA $ 164,941 Decrease in FY'08 Adjusted EBITDA $ (16,213) (1) 45 and 15 store closures in FY07 and FY08, respectively. (2) La Salsa generated Adjusted EBITDA of $1,894 in FY 07 and negative Adjusted EBITDA of $1,385 in FY 08 due to loss on disposal. (3) 41 Carl's Jr. units in FY 07 and 136 Hardee's units in FY 08, and includes related G&A cost reductions. (4) 10 new units in FY 07 & 23 new units in FY 08. (5) Excludes share based compensation and reductions related to refranchising. 69

Hardee s/red Burrito 72

Hardee s/red Burrito Menu 73

Hardee s New Restaurant 74