Introduction
KFC Corporation, doing business as KFC (formerly known as Kentucky Fried Chicken), is an American fast food restaurant chain renowned for its fried chicken. Headquartered in Louisville, Kentucky, KFC stands as the world’s second-largest restaurant chain (measured by sales), following McDonald’s, with over 30,000 locations in 150 countries as of April 2024. KFC is a subsidiary of Yum! Brands, which also owns Pizza Hut and Taco Bell.
KFC was founded by Colonel Harland Sanders (1890–1980), an entrepreneur who began selling fried chicken from his roadside restaurant in Corbin, Kentucky, during the Great Depression. Recognizing the potential of the restaurant franchising model, Sanders opened the first “Kentucky Fried Chicken” franchise in Salt Lake City, Utah, in 1952. By popularizing chicken in the fast-food industry, KFC diversified the market, challenging the hamburger’s dominance. Harland Sanders became a cultural icon, branding himself as “Colonel Sanders,” a persona that remains integral to KFC’s advertising today. However, the company’s rapid expansion overwhelmed the aging Sanders, leading him to sell KFC to a group of investors led by John Y. Brown Jr. and Jack C. Massey in 1964.
KFC was one of the first American fast-food chains to expand internationally, opening outlets in Canada, the United Kingdom, Mexico, and Jamaica by the mid-1960s. Throughout the 1970s and 1980s, the company experienced mixed fortunes domestically, undergoing several changes in corporate ownership. In the early 1970s, KFC was sold to the spirits distributor Heublein, which was later acquired by the R. J. Reynolds food and tobacco conglomerate. Eventually, the chain was sold to PepsiCo. Despite these changes, KFC continued its overseas expansion, becoming the first Western restaurant chain to open in China in 1987.
History: The Harland Sanders Café and Museum in Corbin, Kentucky
Harland Sanders was born in 1890 and raised on a farm outside Henryville, Indiana, near Louisville, Kentucky. At the age of five, Sanders lost his father, which forced his mother to work at a canning plant, leaving Sanders to care for his two younger siblings. By the age of seven, his mother had taught him how to cook. After leaving home at 13, Sanders held various jobs with mixed success.
In 1930, Sanders took over a Shell filling station on U.S. Route 25 just outside North Corbin, Kentucky, a small town on the edge of the Appalachian Mountains. Here, he served travelers the recipes he had learned as a child: fried chicken and other dishes such as steaks and country ham. After four years of serving from his dining room table, Sanders purchased a larger filling station across the road and expanded to six tables. By 1936, his success earned him the honorary title of Kentucky Colonel by Governor Ruby Laffoon. In 1937, he further expanded his restaurant to 142 seats and added a motel, naming it Sanders Court & Café.
Sanders was dissatisfied with the 35 minutes it took to prepare his chicken in an iron frying pan, but he refused to deep fry the chicken, believing it compromised the quality. Pre-cooking the chicken led to wastage at day’s end. In 1939, the first commercial pressure cookers were released, primarily designed for steaming vegetables. Sanders modified one into a pressure fryer, which he then used to fry chicken. This new method reduced production time to be comparable with deep frying while, in Sanders’ opinion, retaining the quality of pan-fried chicken. This innovation was a pivotal moment in KFC’s history, setting the stage for the chain’s signature cooking process and its eventual global success.
Sale and Global Expansion:
In 1964, Colonel Harland Sanders sold KFC to a group of investors led by John Y. Brown Jr. and Jack C. Massey for $2 million (approximately $17 million in 2020). The contract included a lifetime salary for Sanders and the agreement that he would serve as the company’s quality controller and trademark ambassador. By 1970, the chain had grown to 3,000 outlets in 48 countries.
In July 1971, Brown sold KFC to Heublein, a Connecticut-based packaged food and drinks corporation, for $285 million (around $1.8 billion in 2020). Sanders continued to promote the brand until his death in 1980, by which time KFC had become an iconic American brand with an estimated 6,000 outlets in 48 countries, generating $2 billion in annual sales.
In 1982, Heublein was acquired by R. J. Reynolds, the tobacco giant. In July 1986, Reynolds announced the sale of KFC to PepsiCo for $850 million (around $2.0 billion in 2020). The sale was finalized in early October for $840 million. Under PepsiCo’s ownership, KFC became part of its restaurants division, which also included Pizza Hut and Taco Bell. KFC made a significant international expansion by entering the Chinese market in November 1987 with an outlet in Beijing.
In 1991, the KFC name was officially adopted, a move aimed at distancing the chain from the unhealthy connotations of “fried.” The early 1990s saw several successful product launches, including spicy “Hot Wings” in 1990, popcorn chicken in 1992, and the “Zinger” spicy chicken fillet sandwich in 1993. By 1994, KFC operated 5,149 outlets in the U.S. and 9,407 worldwide, employing over 100,000 people.
In August 1997, PepsiCo spun off its restaurants division as a public company valued at $4.5 billion (around $7.3 billion in 2020). The new company was named Tricon Global Restaurants and had 30,000 outlets with annual sales of $10 billion (around $16 billion in 2020), making it the world’s second-largest restaurant company, after McDonald’s. Tricon was renamed Yum! Brands in May 2002.
On March 31, 2011, Priszm, the owner of KFC in Canada, filed for bankruptcy protection in Ontario and British Columbia.
By 2015, KFC was facing challenges, having lost market share to competitors and being surpassed by Chick-fil-A as the leading chicken retailer in the U.S. To address these issues, KFC launched a comprehensive initiative to revamp its packaging, decor, uniforms, and menu. In May 2015, the company began a new series of U.S. advertisements featuring Darrell Hammond as Colonel Sanders. This campaign included a planned rotation of actors, with Norm Macdonald, Jim Gaffigan, George Hamilton, and Rob Riggle portraying Sanders in subsequent ads through the fall of 2016. In January 2018, country music icon Reba McEntire became the first female to portray Colonel Sanders in KFC advertisements.
Recent Developments
In recent years, KFC has continued to innovate and adapt to changing market conditions and consumer preferences. The company has focused on improving the quality of its food, enhancing the customer experience, and expanding its digital and delivery services. Despite the competitive landscape, KFC remains a significant player in the global fast-food industry, leveraging its rich history and iconic brand to maintain its market position and continue its growth trajectory.
KFC’s core product offering is pressure-fried, on-the-bone chicken pieces seasoned with Colonel Harland Sanders’ “Original Recipe” of 11 herbs and spices. This iconic recipe is typically available in individual servings of two or three pieces or in family-sized cardboard buckets that hold between six and 16 chicken pieces. In regions such as Canada and the UK, each chicken is divided into nine different cuts: two drumsticks, two thighs, two wings, two breast pieces, and one keel. However, in the United States, an eight-piece cut is used.
The chicken is hand-breaded at individual KFC outlets with wheat flour mixed with seasoning in a two- to four-minute process. It is then pressure-fried for between seven and ten minutes (the timing varies by country) in oil at 185 degrees Celsius. After frying, the chicken is left to stand for five minutes to cool before being placed in a warming oven. KFC policy mandates that chicken not sold within 90 minutes is discarded to ensure freshness. The type of frying oil used varies regionally and includes sunflower, soybean, rapeseed, and palm oil. A KFC executive noted that the taste of the chicken can vary between regions depending on the oil used and whether the chicken is corn-fed or wheat-fed.
Early Stages of KFC
Colonel Sanders officially started KFC at age 40 in 1930 when he bought a roadside motel in Corbin, Kentucky, and began serving his Southern-style chicken. He perfected his unique blend of 11 herbs and spices in 1939, a recipe that remains top secret to this day. KFC has been an extensive advertiser since establishing its first franchise in 1952, contributing significantly to its global recognition and success.
Future Plans of KFC
KFC is committed to sustainability and has plans to design and build future outlets with a focus on energy efficiency, material efficiency, water conservation, waste reduction, and improved indoor air quality. These “Building Green” standards are part of KFC’s broader strategy to contribute to a more sustainable future.
Marketing Plan of KFC
KFC’s marketing strategy leverages the marketing mix concept, which includes the four Ps: Product, Price, Place, and Promotion. The company’s business strategies are built on product innovation, strategic pricing, effective promotion planning, and optimal placement of outlets. These tactics have been instrumental in KFC’s continued success and brand strength.
Financial History of KFC
KFC’s revenue was $6.8 billion in the most recent financial report. The company’s annual revenue for 2021 was $6.6 billion, marking a 16.49% growth from 2020. KFC’s peak revenue was $13.6 billion in 2012, and its highest quarterly revenue was $2.0 billion in the fourth quarter of 2022. KFC employs 820,000 people, with a revenue per employee ratio of $8,343.
These figures highlight KFC’s significant financial footprint and its capacity for substantial revenue generation, reflecting its status as a leading player in the global fast-food industry.
How KFC managed its initial funds
Harland Sanders was a 65 year old restauranteur who had run a successful restaurant in Corbin, KY, on the main road between Cincinnati and Atlanta.
However, he had patented a technique for making fried chicken that made it crispy on the outside but not dry on the inside. Armed with his patent, he went to restaurants to offer the technology in return for a percentage of chicken sales. He finally found a taker in South Salt Lake, Utah in 1952.
Sanders was already famous in Kentucky and the governor had made him an honorary colonel in 1950. He bought the famous white suit and string tie and as part of the chicken deal he allowed franchises to use his likeness. However, the name “Kentucky Fried Chicken” was invented by his Utah franchisee. The franchisee also coined the phrase “Finger lickin’ good”.
However, in 1959, his original restaurant ran into trouble. The recent completion of Interstate 75 meant his location was no longer attractive. He sold the land and with his pension and savings, turned to selling franchises instead.
From there things went well. Sanders went to Canada as well and met up with the owner of Scott’s restaurants, a buffet chain. The chicken was a hit and the owners of Scott’s came up with the idea of using the name and Sanders persona to sell the chicken in Canada. For a long time, Scott’s was the only franchisor in Canada.
KFC faced several problems
KFC faced several problems when entering the Indian market in 1995. Regulatory authorities found KFC’s chicken did not comply with Indian food safety laws. KFC also faced protests from PETA over alleged animal cruelty at its poultry farms. However, KFC was able to adapt to local tastes and culture in India and implement affordable pricing. A survey now shows KFC is one of the most preferred places for non-vegetarian food in India.
KFC Success Story
KFC was founded by Colonel Harland Sanders, who tried his luck in different professions around 1930. It’s estimated that about 5 billion people have visited a KFC restaurant at some point, and on any given day, 8% of the Earth’s population will visit a KFC. It didn’t happen overnight, though. From humble beginnings as a small restaurant with just $100 in the capital, KFC grew into an international powerhouse through some careful planning and some luck. In 1936, Colonel Sanders had what he called his “eureka moment” when he put together a new fried chicken recipe for his restaurant that made it extra crispy. This discovery was great for his business because people loved the new recipe, and there were no other restaurants nearby that offered anything similar. However, Colonel Sanders lost everything he owned when his home was destroyed after being raided during World War II. He went on to serve as a Kentucky state police officer before eventually getting back into the food industry again.
Conclusion
Unfortunately, I don’t have specific details about the overall conclusion or success of the KFC business. As an AI assistant, I don’t have comprehensive information about the detailed business outcomes and financial performance of individual companies.
However, based on general knowledge, here are a few points about the success of the KFC brand:
– KFC (Kentucky Fried Chicken) has remained a major global fast food chain for decades, with thousands of locations worldwide. This suggests the brand has been able to maintain and grow its business over the long term.
– KFC is one of the largest fast food chicken restaurant chains globally, competing successfully against other major players in the fried chicken market.
– The company has been able to expand into many international markets, adapting its menu and operations to local tastes and regulations. This geographic diversification has likely contributed to its continued success.
– While there may have been some challenges or periods of decline over the years, overall KFC appears to have remained a profitable and popular fast food brand globally. Its longevity and expansion indicate the business model has been largely successful.
However, without access to the company’s internal financial data and strategic plans, I can’t provide a definitive assessment of the ultimate conclusion or degree of success for the KFC business. I’d encourage you to research further using business reporting and analysis from reliable sources.