India will be Carl's Jr's largest market outside the US: Ned Lyerly

Interview with President (international), CKE Restaurants Holdings

After studying India for about three years, California-based premium burger chain, Carl's Jr - a brand endorsed by celebrities like Paris Hilton, Kim Kardashian and Padma Lakshmi, will open shop here in April 2015. Ned Lyerly, president (international), CKE Restaurants Holdings, which runs Carl's Jr, maker of charbroiled Thickburgers, tells Sounak Mitra about developing a customised menu and that India has the potential to be its second-most important market. Edited excerpts:

Burger chains are making a beeline for India. How would you differentiate from the rest?

We have been studying the market, and have invested about $1.5 million in India in consumer research, product development and tasting trials in the past three years. We take time to start operations in any country. We are already present in 33 countries now, and this would go up to 40 by 2015-end.

Every market is different, so is India. Our burgers are unique, unlike any other. They would be premium, but our cooking and delivery make them desirable. We have spent about two years in customising the menu. We'll stay premium, low pricing is not on our agenda. 

How would you customise for India?

For the first time in our history, we are introducing a vegetarian burger. This, we may also take to other markets, like West Asian and even the US. We have never spent so much time in developing a veg menu. Quality, hospitality and innovation would be key. But we never change some of our core practices that are the same everywhere, like our charbroiled burgers.  

How many outlets would you begin with?

Cybiz BrightStar Restaurants, our partner for the north and west, will be opening atleast 100 outlets in the first five years. Over the next five to seven years, India would have the second-most number of outlets, after Mexico, outside the US. Mexico will double in the next five years to about 400 stores, but the market has a threshold. But the opportunity in India is huge. In the long term, India would be our largest market, in terms of total outlets, outside the US where we have 2,900 stores. 

How fast are you growing in other international markets?

We have doubled our international presence in the last four years, and we would double that in the next four years. Besides India, new markets include Australia, Republic of Columbia and Bangladesh.

Revenue-wise, how much do international operations contribute?

At the moment, about 10 per cent of our revenues comes from international markets. Over the next five years, we hope this would grow to about 35 per cent. And eventually, revenue from international markets together would equalise with revenue from our home market, albeit in the long run. 

Which market gives you a higher ticket size?

Markets such as New Zealand and Singapore.

Would you appoint a separate franchisee for the rest of India?

There is no plan as of now. We'll see how the present association (for the north and west) goes with our current partner, and then decide on expansion.

You have created hype in each of the markets you entered with your promotions and endorsements. What plans for the India launch?

We are evaluating certain things. But are yet to take a call. Celebrity endorsements and other promotions would be decided closer to the launch date.