Carl’s Jr., the iconic California “healthier” fast-food chain, announced earlier this month that it is quitting the Golden State for greener pastures in Tennessee.
Investors Business Daily reports: “CKE Restaurants (Carl Karcher Enterprises), the corporate parent of Hardee’s and Carl’s Jr. restaurants, announced that they are relocating to Nashville, Tennessee.”
According the company’s website, it was in 1941 that a young “Carl N. Karcher and his wife, Margaret, [made] a leap of faith … For 70 years and over 1,200 restaurants later, Carl’s Jr.® has become known as the place to go all across the West for juicy, delicious charbroiled burgers.”
The move to the deep South by a company that self-identifies as “Western” should come as no surprise to anyone whose paying attention to California politics.
Andy Puzder, CKE’s CEO, has been threatening to move for several years, warning California’s elected officials and regulators that if they did not do something to reign in the prohibitively high cost of building a new store and doing business in California, CKE would leave.
That day has finally come, even though the IBD story notes that “CKE’s official line is that the firm is relocating because it has less need for office space as it consolidates operations.”
It adds, however, that “company executives say this with a wink. Tax savings are a big factor, as is the stifling regulatory environment on the left coast, where businesses are treated like villains and rich people as cash dispensers for big government programs.”
CKE is following in the footsteps of something close to 9,000 other companies that have expanded elsewhere or pulled up stakes altogether since 2008, according to a 2016 Breitbart News analysis of a report by Spectrum Location Solutions (VLS), a site selection service for companies.
Tennessee is one of several states aggressively recruiting California companies with generous incentives including free or heavily subsidized real estate, expedited project approvals, and low or no state income tax. If California continues its current course — and there is no indication of any course correction — more California companies will be tempted to relocate to friendlier climes.
In spite of making noise in Sacramento about addressing California’s notoriously unfriendly business climate — with the creation of yet another bureaucracy known as “GoBiz” ostensibly designed to spur economic growth — Gov. Jerry Brown has signed hundreds of new regulations every year, suffocating business owners with more paperwork, requirements and restrictions that suck up their time, and tax their resources.
One of the most disturbing sections in Spectrum’s 2016 report on why businesses leave California is titled: “Why California’s Business Environment is Likely to Worsen.” Most of the author’s more fearful predictions have already come true, making his summation sound prophetic:
“California is considering imposing a broad set of taxes on businesses in 2016 and 2017 — a ‘tsunami’ of levies that may trigger the harshest levies on private-sector finances ever organized by the state. The proposals, if enacted, will worsen California’s business environment, so much so that a result may be an increasing number of businesses leaving California for greener domestic or international pastures.”
The only real question remaining is: which California company will be next to leave?