Tension is growing between franchisees at one of the most popular restaurant food chains. According to franchise owners, sales have dropped significantly over the last two years. “‘Unthink’ hurt KFC as a brand,” says one franchisee. “We told our customers not to think of us as a fried chicken chain.”
KFC franchise owners filed a lawsuit against YUM! Brands in January of 2010. Statements in the lawsuit claim that reduced sales are a direct result of actions taken by Roger Eaton, president of YUM! Brands.
In early 2009, Eaton made the decision along with managers to change the marketing strategy from KFC’s original recipe fried chicken to KFC’s grilled chicken and sandwiches.
Eaton became president of KFC in 2008. Since this change, the working relationships between managers and franchisees have become non-existent. Franchisees maintain that YUM! Brands, mainly Eaton, refused to hear their pleas regarding the marketing changes.
The KFC National Council and Advertising Cooperative represent KFC franchise owners in the company’s marketing decisions. YUM! Brands released ads marketing Kentucky Grilled Chicken without authorization from the KFC National Council and Advertising Cooperative.
The lawsuit claims, KFC management began ignoring franchise owners’ feedback, declining meetings and exhibiting a take it or leave it stance. The council claims that the company would pull all national spots for a month if the franchisees did not approve the ads they wanted to run. It states, “After operating smoothly and successfully under NCAC Certificate and Bylaws…for almost twelve years, from 1997 to 2008…NCAC’s working relationship with KFC changed abruptly.” Furthermore, the lawsuit cites, “…the appointment of a new president…Roger Eaton.”
Jonathan Blum, a senior vice president at Yum, gave a statement regarding the lawsuit, “Yum Brands fully expects to win the lawsuit and minimize the waste of time and money spent on it so that we can continue to satisfy our customers and grow the business.”
Cocolin, second vice president of the Association of Kentucky Fried Chicken Franchisees, “We need both, but our fried is 80 percent of our business,” he said. “That kind of speaks for itself right now.”