Fast-food franchisees ask chains to tone down racy ads

NEW YORK -- Provocative may be the stuff of fast-food ads in good times, but in tough times, tolerance for the risqué runs short, especially among franchisees.

Fast-food chains Burger King and Hardee's have made names for themselves by being provocative. But franchisees are pushing back on some ads even as sales remain soft in the $189 billion fast-food sector, which accounts for 30% of annual restaurant industry sales. Fast-food sales are expected to fall 1% this year, Technomic, a Chicago restaurant and consulting firm, estimates.

"This is hardly the time you want to alienate any potential customer," says Ron Paul, Technomic president.

Hardee's biggest franchisee, Boddie-Noell Enterprises, recently sided with TV decency advocacy group Parents Television Council over an ad for a new breakfast product, Biscuit Holes. The fried dough balls with white icing served on the side are an alternative to doughnuts.

The ads feature a "marketing research" person who, in one ad, asks people to name the product. Responses include "goody balls" and "sugar nuts." Boddie-Noell was OK with that ad but took issue with a second taste-test ad. In that one, the researcher asks people whether they prefer Product A or Product B, and people answer "A Hole" or "B Hole."

In response to a complaint from the decency group, Boddie-Noell Chairman Mayo Boddie said he would not run the second ad in his markets. He also asked Hardee's parent, CKE Restaurants, to pull the ad altogether.

Boddie-Noell, which is based in Rocky Mount, N.C., and has 350 Hardee's restaurants, deferred questions to CKE. "If a franchisee has a significant issue with an ad, they usually have options," says Brad Haley, CKE's executive vice president for marketing. "Different people draw the line in different places in what they consider acceptable or not," Haley says. "When the economy is as challenging as it is now, and sales soften, people start to question everything."

Despite a 2.5% jump in the second quarter for same-store sales (sales of stores open for more than a year, the best measure of health for a restaurant) at Hardee's, sales have begun to slow in the third quarter. For the four weeks ended July 13, Hardee's same-store sales fell 3.6%.