The decision by CKE Restaurants Inc. to sell off Hardee's locations in weak markets was motivated by the comparative success of the company's other chain, Carl's Jr., which has been more profitable.

CKE, the Carpinteria-based parent of Carl's Jr. and Hardee's fast-food chains, announced last week that it was selling 23 Hardee's in Indiana and Ohio.

Chief Executive Andrew Puzder said the company took a hard look at its existing markets over the last 18 months and decided to sell the Hardee's restaurants in markets where it didn't intend to open new locations.

"We didn't have enough penetration in those markets to justify building more," he said. "We felt it was smarter to sell to franchisees and let them handle it."

The buyer is franchise operator Midwest First Star Inc., which committed to building at least seven new locations as part of the deal. CKE had previously completed the sale of six Hardee's locations in Iowa to Westar Foods Inc., which will also build four new restaurants.

Brian Moore, an analyst with Wedbush Morgan Securities Inc., thinks the move was a good one for CKE because the Hardee's brand hasn't been as profitable as Carl's Jr.

Same-store sales at Carl's Jr. rose 4.2 percent in a four-week period ended Aug. 11, compared with 1.4 percent at Hardee's.

Rising food prices are an issue, especially over the last year. Puzder said that the company most likely felt the impact of cost more than other fast-food chains because it owns a higher percentage of its restaurants.

Moore said that CKE is particularly exposed to the price of beef, given that about 20 percent of its food spending goes to the commodity. Most casual dining chains spend about 10 percent on beef.

But CKE hit a home run with the introduction of a new burger in June. It's called Prime Rib Six Dollar Burger at Carl's and Prime Rib Thickburger at Hardee's. The burger, priced at $5.69 at both eateries, is the first new product to have been introduced at the restaurants in the last couple of years.

Previously, Carl's Jr. was losing market share to Jack in the Box's sirloin burgers but has rebounded with the prime rib burger, Moore said.

"That they can have one of the most expensive burgers in fast food and be able to drive same-store sales speaks to their strength in burgers," he said.

Company shares have increased nearly 12 percent since the burger's introduction.

The U.S. restaurant sector was down about 20 percent over the last 12 months. However, fast food grew by 4.1 percent in 2007.

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