Carl Karcher Enterprises

REPORTS OF CONNECTIONS between the Ku Klux Klan and the fast food holding company, best known for hamburger chain Carl's Jr., are almost certainly urban legends. The misdeeds of Carl Karcher Enterprises (CKE) are not racial but financial, including an insider trading scandal, misvaluation of Arizona acquisitions, and squabbles with co-branding partners.

CKE is named for founder Carl Karcher, who parlayed a hotdog cart into a 2,000-restaurant business with almost $3 billion in fiscal 2003 sales. In 1984, the first year that CKE offered franchises, the company also expanded from California into Texas, a venture that lost money from the start. An internal company report was available to Carl Karcher and his brother Don, then president of CKE, who gave 14 relatives advance warning of the ...