The Hardee's boys.

• Author: Speizer, Irwin
• Position: Hardee's Food Systems Inc.'s management team

A new management team of fast-food sleuths is on the case, trying to solve the mystery of the disappearing market share.

You deserve a break today. Have it your way. Where's the beef? McDonald's, Burger King, Wendy's: the brawniest of the burgers. Then there's Hardee's. In the eat-or-be-eaten fast-food jungle, Hardee's is the joint without a jingle.

Just a few years ago, Hardee's was poised as a prime predator. With billions of dollars in sales and a global marketing perspective, it had passed Wendy's in 1987 and was chasing Burger King. Then everything landed in the dumpster. Hardee's slipped back to fourth place in 1994 and remains there, still struggling. Its restaurants open at least a year saw sales decline 7.5% in 1995.

Now, more than almost any time in its history, North Carolina's home-grown hamburger chain needs a marketing hook, a snappy song or a hot new burger that will roll around in the collective unconscious ready to leap from the left side of the brain at the first sight of a Hardee's sign. Hardee's Food Systems Inc. definitely needs something to lift the gloom that has hung over its Rocky Mount headquarters for two and a half years now.

Enter Stephen McManus and Ray Perry, the new Hardee's boys charged with solving the mystery of the disappearing market share. McManus, president and CEO, and Perry, chief operating officer, arrived last year with a long history in the fast-food business. They have embarked on a top-to-bottom overhaul of the company that includes all the classic corporate cleanup strategies: job cuts, modernization, new-product development and fresh marketing strategies.

So far this year, Hardee's has announced it's selling its lagging Roy Rogers chain, closed a plant in Rocky Mount that resulted in 232 layoffs, cut 45 employees from the corporate office and shut down a "small handful" of poorly performing restaurants. McManus says he plans to close 3% to 5% systemwide, including some faltering franchise operations. Opening new restaurants has slowed to a trickle until the chain's problems are under control.

McManus and Perry both acknowledge what consumers already know: Hardee's has not been doing a very good job of dishing up fast food. "We have not measured up to consumer expectations over time," McManus concedes. "That's the most important issue we face."

Perry recalls arriving last September in time for the quarterly consumer-satisfaction survey, which measures the performance of not just Hardee's but three other top burger chains. The independent survey looks at 2,000 to 2,500 restaurants in 30 key markets and ranks them on such things as speed, cleanliness and quality of food. For April to June last year, Hardee's came in dead last. "The numbers were pretty abysmal," Perry says. "And they haven't gotten a lot better."

Changing that is a big and complicated undertaking. While Hardee's is narrowly focused, concentrated in hamburger restaurants, it has a vast global network and a system that includes some of the largest franchise operators in the fast-food industry.

Hardee's Food Systems controls about 3,500 Hardee's restaurants in the United States and 11 foreign countries. It owns and operates about 900; the rest are franchises. As of late May, the company had sold about half of the 400 units in its Roy Rogers roastbeef-sandwich chain. It plans to unload the rest by year-end.

More than a third of the Hardee's franchise restaurants are held by two giant franchisees. Flagstar Cos., a Spartanburg, S.C.-based public company, operates 600 in 12 states. Boddie-Noell of Rocky Mount operates 360 in seven states, making it the largest privately held U.S. franchise outfit in the fast-food industry.

Hardee's likes to point out that it has 285 franchisees and that nearly 200 have three...