CKE Restaurants CEO: Too many regulations hurt business

Andy Puzder on job creation, economy


This is a rush transcript from "Your World," February 16, 2012. This copy may not be in its final form and may be updated.

STUART VARNEY, GUEST HOST: Say what you like. The guy behind these ads really knows how to sell burgers, doesn’t he?

But was he able to sell Congress on his fight against beefed-up regulations?

CKE Restaurant’s chief executive, Andy Puzder, joining me now.

Sir, we’re going get to those ads. Believe me, we’re going to get to Kate Upton, I guarantee it.


VARNEY: But you’ve just testified in front of Congress. You object to all the regulations that are put on your organization. You’re the parent company of Hardee’s and Carl’s Jr.

OK. We get a lot of people telling us that regulations are really hurting small business. You testified about that today. Can you give me one example of a regulation or a rule that really hurts you?

PUZDER: Absolutely.

We’ve got -- one of the things I testified about this morning was the menu labeling provisions that were part of the Patient Protection and Affordable Care Act. They require that we put caloric information on our menu boards. Now, we already post the information, nutritional information in our restaurants, but it’s going to cost our company about $1.5 million to replace all those menu boards.

It’ll cost the industry $315.1 million to comply and $44 million a year on an ongoing basis. So it’s a huge expense. All of the research to date shows that putting caloric information on menu boards has no impact on consumers’ eating habits. We already post it in our restaurants. It’s available on the Internet.

It’s just -- it’s a complete waste of money and it’s a complete waste of effort. And it’s just a huge example from the restaurant industry as to over-regulation that’s useless.

VARNEY: If you were to get rid some of these regulations, not all, but some of them, do you think that your work force would be healthier, better off, that your restaurant chains would be healthier, better off, and more financially vigorous, and that America would be a better place? Do you really think so?

PUZDER: Yeah, I absolutely think so.

In fact, we would have more money to invest in job-creating activities instead of regulation compliance activities. We have got – we’ve got the Polygraph Protection Act, the Genetic Information Nondisclosure Act. We’ve got an 11-page single-spaced list of regulations that you have to comply with to operate and open a simple quick-service restaurant chain, 57 categories of regulations, 11 pages long.

It’s too much. It hurts the economy.

VARNEY: So, you are telling me that if you got rid of these regulations, got rid of the cost that’s involved, you would use the extra money that comes to you, you would expand, you would hire, you’d definitely do that? Regardless of what happens to the economy in the future, you’d use that extra money to expand?

PUZDER: I want to say, first of all, we do need regulations. I’m not saying we should get rid of all regulations. We need regulations because we can do -- there are things the private sector wouldn’t do on its own that I think government should encourage the private sector to do.

But the volume has gotten so spectacularly large, that it’s hard to tell whether you’re in compliance with the law or not in compliance. If we have more money -- at the end of year, we pay our bills, we pay down our debt and we reinvest in our business. And if we have more money to reinvest, we will grow faster, we will hire more people, and we will generate more consumer demand and more tax revenue.

VARNEY: Now, you hired Kate Upton, didn’t you?


PUZDER: Yes, we did.

VARNEY: You hired her to eat a burger in a very sensual fashion.

And this follows on the ads that you did with Paris Hilton not so long ago.

PUZDER: Neil loves that ad.


VARNEY: Yes. So do I.

(LAUGHTER) VARNEY: Now, are you trying to tell me that sex sells?

PUZDER: Well, strangely enough, sex does sell.

Our demographic, our target is young hungry guys. And everybody fast- forwards through commercials nowadays. Nobody’s going to -- no young hungry guy is going to be fast-forwarding through this commercial. There will be version available on the Internet. It’ll something I’m sure people will download quite often.

She was great. And really I didn’t know -- when we hired her, when the ad agency suggested her, I had no idea that she was going to be on the cover of Sports Illustrated. So this turned out to be great.

The other thing, quickly, is, coincidentally, the committee I testified in front of this morning, the Energy and Commerce Committee, is chaired by her uncle. So, all of a sudden, she’s everywhere.

VARNEY: Did her uncle have anything to say to you about the lascivious ads that you are running with his niece?

PUZDER: Well, I was testifying before a subcommittee. He wasn’t there.

But on Fox News this morning, I heard her say that he called her and congratulated her. So, I don’t think he objects.

VARNEY: Sir, you’re real straightforward and honest.

Andy Puzder of CKE Restaurants, you went right out there. Sex sells. Hire a sexy model and put them on the air and you can’t lose, right?

PUZDER: I think it do very well for us. I really feel very good about this ad.

VARNEY: Yes, I think it will.

We just gave you an enormous amount of publicity right there.

PUZDER: I appreciate that.

VARNEY: All right. I’m sure you do.

Andy Puzder, thanks for joining us, sir. It’s a great pleasure to have you with us.

PUZDER: Thank you, Stuart. It’s wonderful to be here.

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