CKE Restaurants (NYSE:CKR) has made waves by going against the grain with its menu choices. While McDonald's (NYSE:MCD) and other fast food outfits stressed healthful items, CKE rolled out ever larger burgers at its Carl's Jr. and Hardee's chains. This counter-culture approach has worked remarkably well, although there are clear signs that initial success is cooling off.
Now, CKE is taking an unconventional path again -- in an area that could pay off over the long term. The Carpinteria, Calif.-based restaurant operator announced Wednesday it will open 50 new Carl's Jr. franchise restaurants in Russia over the next five years.
The move comes as other fast food outfits, including McDonald's and Yum! Brands (NYSE:YUM), are rushing full-steam ahead into the vibrant market in China. Certainly China's growth is hard to ignore, but as these two fast food giants rapidly add locations, intense competition there could reduce returns in the near term.
As its expansion into Russia suggests, CKE seems to be willing to take a chance on markets that are below the radar. The Russia expansion is not the first sign that the company is pursuing this strategy. Earlier this year, CKE disclosed that its Hardee's unit opened its first restaurant in Amman, Jordan, in cooperation with the Middle Eastern company Americana Group. Eight more Hardee's are slated to open in Jordan over the next three to five years. Prior to that deal, in late 2004, CKE entered into a franchise agreement to open 25 Carl's Jr. restaurants in Singapore and Malaysia over the next eight years.
The impact of CKE's offbeat international expansion plans won't be clear for some time. But the company's moves to capitalize on less hotly contested markets are worth monitoring.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
