Burger keen: Boddie-Noell, the largest Hardee's franchisee, hews to the line so the ailing brand can hone its image.

• Author: Maley, Frank
• Position: North Carolina 100

Hardee's, the brand Bill Boddie's daddy and uncle helped build, is struggling. That's why he's in St. Louis. It's March 2002, and Boddie-Noell Enterprises Inc. is making money. But profits aren't what they were in the glory days, back when Hardee's Food Systems Inc. and its largest franchisee both were based in Rocky Mount, back before Boddie's dad, Mayo, made him CEO. Down two or three percentage points one year, a few more the next.

Franchisees are meeting with executives of CKE Restaurants, the Carpinteria, Calif.-based company that bought Hardee's in 1997. They're here to hear Hardee's Los Angeles ad agency report on its efforts to come up with a plan to boost the brand's sagging appeal. This is franchisee Lee Staak's take on it: "Hardee's is the most-avoided fast-food restaurant. Your customers hate you. You've got no relevant product. You've got no relevant message, therefore, you've got no relevant image. You're irrelevant. And for us to create advertising for an irrelevant brand, we can't do that."

In their hearts, most of the franchisees know it's true. The number of restaurants in the chain has dropped 21% in four years, to 2,390. Hardee's once meant hamburgers, but its share of the fast-food burger market has shrunk from 6.6% to 4% since 1997, according to Technomic, a Chicago-based restaurant consultant. The year before, it dropped from fifth to sixth. Menus vary widely from region to region, even store to store. Fried chicken, a staple in the South, is a nuisance in the North. Boddie-Noell is experimenting with submarine sandwiches in one restaurant. Burgers are one of the weakest items, especially in the Southeast. Customers are confused. So are franchisees. And they're a little desperate.

Big as it is--for decades, a staple in the top tiers of BUSINESS NORTH CAROLINA'S ranking of the state's 100 largest closely held companies--Boddie-Noell is in a fix most franchisees, no matter how large or small, find themselves: It lives or dies by its brand. Though the company is diversifying, its more than 300 Hardee's outlets contribute better than 75% of its revenue. "If Hardee's has a problem," Boddie admits, "we've got a problem."

You need a revolution, the ad agency says. Radical change is required. But what comes out of the meeting is more like a counter-revolution. In the months that follow, Boddie and his fellow franchisees relinquish some freedom--as well as a few money-making menu items--to build a coherent brand identity. Sales will drop initially as the menu is trimmed. Some restaurants won't survive. Now, two years later, franchisees are gambling on a strategy straight out of the past: betting their future on a burger.

Franchising is big business in North Carolina and the nation. Nearly 8% of all jobs in the state in 2001 were in franchised...