Yum! Brands remains the owner of KFC today. KFC is an American restaurant that specializes in fried chicken and related products and was founded by Colonel Harland Sanders in 1930. From a sole roadside restaurant in Corbin, Kentucky, KFC is now the second largest restaurant chain in the world by sales with revenue of $2.83 billion in 2022. The company also operates over 27,000 restaurants in 145 countries and territories.
| Aspect | Description | Analysis | Examples |
|---|---|---|---|
| Products and Services | KFC (Kentucky Fried Chicken) is a global fast-food restaurant chain specializing in fried chicken. The company offers a menu of fried chicken pieces, sandwiches, wraps, sides, and beverages. KFC is known for its proprietary blend of “Original Recipe” seasoning. | KFC’s core offerings revolve around its signature fried chicken and proprietary seasoning. The menu includes various chicken-based products, sides, and drinks. | Original Recipe fried chicken, KFC Zinger sandwich, KFC Famous Bowl, KFC sides like coleslaw and mashed potatoes. |
| Revenue Streams | KFC generates revenue primarily through the sale of its food products in its restaurants. Additional revenue may come from franchise fees, merchandise sales (e.g., branded apparel), and promotional tie-ins. | In-restaurant sales of food products are the main revenue source. Franchise fees from franchisees expand the brand’s reach. Merchandise sales and promotions contribute to diversified income. | Revenue from in-restaurant food sales, franchise fees, branded merchandise sales, promotional tie-ins. |
| Customer Segments | KFC serves a diverse customer base, including individuals and families seeking quick-service meals, fried chicken enthusiasts, and consumers looking for affordable dining options. | KFC’s wide appeal spans different demographics, making it a popular choice for those craving fried chicken and fast food. | Families, individuals seeking quick-service meals, fried chicken enthusiasts, budget-conscious consumers. |
| Distribution Channels | KFC primarily distributes its products through its network of company-owned and franchised restaurants. It also offers online ordering and delivery through its website and mobile app. | The combination of physical restaurants, online ordering, and delivery services ensures accessibility and convenience for customers. Digital ordering enhances customer convenience. | Company-owned and franchised restaurants, KFC website for online orders, KFC mobile app, delivery services (e.g., Grubhub, Uber Eats). |
| Key Partnerships | KFC collaborates with franchisees who operate independently-owned KFC restaurants. These franchise partnerships help expand the brand’s presence globally. KFC may also form promotional partnerships with other companies for special menu items or promotions. | Franchise partnerships are crucial for expanding the brand’s reach and ensuring consistent quality. Promotional partnerships create excitement and drive sales. | Collaborations with franchisees for restaurant ownership, promotional tie-ins with companies for limited-time menu items. |
| Key Resources | KFC’s key resources include its brand recognition, secret recipe, restaurant locations, supply chain and logistics, marketing and advertising, and a global workforce. | The KFC brand is synonymous with fried chicken. The secret recipe and supply chain efficiency ensure product consistency. Restaurant locations are essential for accessibility. Marketing campaigns support brand growth. | KFC’s brand recognition, secret recipe, global restaurant network, supply chain infrastructure, marketing materials, team of employees. |
| Cost Structure | KFC incurs costs in food sourcing and preparation, restaurant operation and maintenance, franchise support, marketing and advertising, employee wages, and supply chain logistics. | Sourcing quality ingredients and maintaining consistency in food preparation are significant costs. Operating and maintaining restaurants and paying employee salaries are essential for customer service. Investment in marketing and advertising supports brand growth. | Sourcing chicken and ingredients, restaurant maintenance, employee wages, marketing campaigns, supply chain logistics. |
| Competitive Advantage | KFC’s competitive advantage lies in its secret recipe for fried chicken, brand recognition, global restaurant network, commitment to quality and consistency, and affordability. It offers a unique and recognizable taste in the fast-food industry. | KFC’s proprietary recipe and global consistency set it apart in the fast-food industry. The brand’s affordability appeals to budget-conscious consumers, while its taste and brand recognition draw fried chicken enthusiasts. | Secret recipe for “Original Recipe” fried chicken, KFC’s “Finger Lickin’ Good” slogan, KFC’s $5 Fill Up value meals. |
| Value Proposition | KFC offers customers a convenient and affordable dining experience with its signature fried chicken. It provides a familiar taste and a wide range of menu options, appealing to those looking for a quick and tasty meal. | KFC’s value proposition centers on providing a familiar and satisfying dining experience with its secret recipe fried chicken. It caters to individuals and families seeking affordable and delicious comfort food. | Enjoying KFC’s Original Recipe fried chicken, ordering KFC’s family-sized buckets, trying limited-time menu items. |
Short history
Sanders learned to cook from an early age after his father died young and his mother was forced to take up work to make ends meet. He later left home at the age of 13 and worked in various industries to mixed success.
After stints as a railroad worker and insurance salesman, he took over a Shell gas station in Corbin, Kentucky, and at some point converted the storeroom into a small dining area where he served meals to weary travelers.
In 1934, Sanders acquired the lease to a busier gas station across the road. There he started to sell fried chicken, but he became dissatisfied with the fact that it took 35 minutes to cook.
Not wanting to deep fry the chicken because it dried it out, Sanders adapted an early commercial pressure cooker to speed up the process and retain moisture.
The first franchises
When a new highway that would bypass Corbin was announced, Sanders saw the writing on the wall and sold his businesses.
He then traveled the country and pitched a franchise model to restauranteurs where they would pay a percentage of chicken sales in exchange for access to his secret blend of herbs and spices. Franchisees would also have access to Sanders’ cooking method as well as the marketing rights to his name and likeness.
The first KFC franchise opened in Salt Lake City, Utah, in 1952. Owner Pete Harman – who owned many other restaurants in the city – saw his sales increase by 75% in the first year (with most of the attributable to fried chicken).
Harman was also friends with sign painter Rodney L. Anderson, who came up with the name “Kentucky Fried Chicken”. Sanders later adopted the name because it distinguished his product from deep-fried “southern style” chicken already sold across America.
Expansion
Harman was instrumental in growing the business early on and is often credited as one of KFC’s spiritual co-founders as a result. He trademarked the company’s “It’s finger lickin’ good” slogan and, in 1957, bundled chicken, bread rolls, and gravy into a bucket and marketed it to families.
KFC franchisee Dave Thomas – who later founded Wendy’s – was also a key figure in the late 50s and 60s. He introduced the emblematic rotating red bucket and was a proponent of the early take-out system Sanders had pioneered.
KFC became the largest fast food operation in the USA by 1963, thanks largely to its popularization of chicken as a fast food staple and alternative to the hamburger.
Ownership structure
Based on a belief that no suitable family members existed to take over the company, Sanders sold KFC to Harman, Thomas, and a small assortment of financiers and entrepreneurs in 1964.
KFC was then sold to spirits distributor Heublein in the early 1970s before the latter was taken over by food and tobacco conglomerate R. J. Reynolds. In 1986, R. J. Reynolds sold KFC to PepsiCo for $850 million to reduce its debt, and it was also anticipated that PepsiCo’s merchandising expertise would be an asset to the restaurant chain.
Pepsi decided to spin out its restaurant division as Tricon Global Restaurants in 1997 to focus on its core beverage and snack business. The division’s name was later changed to Yum! Brands after a merger with Yorkshire Global Restaurants (now A&W Restaurants).
Yum! Brands remains the owner of KFC today.
Key takeaways:
- KFC is an American restaurant that specializes in fried chicken and related products that was founded by Colonel Harland Sanders in 1930.
- When a new highway that would bypass the town of Corbin was announced, Sanders sold his gas station businesses. He then pitched his fried chicken and business model to restaurant owners in the United States and eventually opened the first KFC franchise in Utah in 1952.
- Sanders sold KFC to a group of investors in 1964 after concerns over a lack of suitable heirs. PepsiCo bought the company in 1986 and, in 1997, spun out its restaurant division. The division, now known as Yum! Brands, still own KFC today.
Key Highlights
- KFC Overview: KFC, short for Kentucky Fried Chicken, is an American restaurant chain founded by Colonel Harland Sanders in 1930. It specializes in fried chicken and related products.
- Ownership and Growth: KFC started as a small dining area in a gas station in Corbin, Kentucky. Sanders adapted a commercial pressure cooker to speed up the cooking process of fried chicken, retaining its moisture. The first KFC franchise opened in 1952 in Salt Lake City, Utah.
- Early Figures and Expansion: Early figures like Pete Harman and Dave Thomas played crucial roles in growing KFC. Harman trademarked the iconic slogan “It’s finger lickin’ good” and introduced the concept of family meals. Dave Thomas introduced the rotating red bucket and contributed to the take-out system.
- Popularity and Ownership Changes: KFC became the largest fast food operation in the USA by 1963, largely due to popularizing chicken as an alternative to hamburgers. Colonel Sanders sold KFC to a group of investors in 1964 due to concerns about suitable heirs. It was later sold to spirits distributor Heublein, then R. J. Reynolds, and ultimately to PepsiCo in 1986.
- Yum! Brands Ownership: PepsiCo spun out its restaurant division in 1997, forming Tricon Global Restaurants, which later became Yum! Brands after merging with Yorkshire Global Restaurants (now A&W Restaurants). Yum! Brands remains the owner of KFC.
- Current Status: KFC is now the second-largest restaurant chain in the world by sales, operating over 27,000 restaurants in 145 countries and territories. In 2022, KFC reported revenue of $2.83 billion.
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