KFC Brand Change to Grilled Ignites Lawsuit from Franchisees

KFC’s recent advertising campaign to shift its brand to “grilled” instead of “fried” has sparked strong reaction from its franchisee community since it started the promotion in 2008. But last week, according to a Washington Post article this morning, that disapproval has now ignited a lawsuit by the KFC National Council and Advertising Cooperative, which represents KFC franchise owners in the company’s marketing decisions.

The news report states,

The simmering dispute erupted into a lawsuit filed by franchisees this week that claims KFC management ignored their pleas to stay true to the colonel's original recipe for a product that could be no more than a flash in the pan, and instead devoted the advertising budget to promoting the new grilled chicken.

The Kentucky Fried Chicken name which once said it all is now being dubbed as KGC, meaning Kentucky Grilled Chicken. Last spring when the corporate office launched its new product, proclaiming an UNFry Day, its ads encouraged customers to “unthink KFC” and established a new “grill nation.” The article states that KFC has invested a lot in its new program without the support of the franchisees.

The world’s most popular chicken chain is betting heavily that its grilled chicken—which racked up nearly $1 billion in sales in its first year—is the Next Big Thing. That has angered a coalition of franchise owners, who run most of the restaurants and believe the focus should remain fried.

KFC’s parent company Yum! Brands says the lawsuit is baseless.

“Yum Brands fully expects to win the suit and minimize the waste of time and money spent on it so that we can continue to satisfy our customers and grow the business," said Jonathan Blum, a senior vice president at Yum.

According to the article, the “furor over the fowl began in 2008 when Yum tapped Roger Eaton, who led KFC’s international divisions, to oversee the brand.”

That included dealing with the KFC National Council and Advertising Cooperative, which represents KFC franchise owners in the company's marketing decisions.

The suit claims that under Eaton’s tenure, KFC executives began dismissing franchise owners’ input, refusing to attend meetings and adopting a take-it-or-leave-it attitude.

While Yum! chief executive David Novak states that the lack of healthy options on the menu was keeping some customers away, Jim Cocolin, second vice president of the Association of Kentucky Fried Chicken Franchisees, said fried chicken still rules the roost at his restaurants.

"We need both, but our fried is 80 percent of our business," he said. "That kind of speaks for itself right now."

Article:  Franchises sue KFC over shift to grilled chicken