KFC (also commonly referred to by its historical name Kentucky Fried Chicken) was founded by Colonel Harland Sanders, an entrepreneur who began selling Southern fried chicken from his roadside restaurant in Corbin, Kentucky, during the Great Depression. Sanders identified the potential of restaurant franchising, and the first "Kentucky Fried Chicken" franchise opened in Salt Lake County, Utah, in 1952. KFC popularized chicken in the fast-food industry, diversifying the market by challenging the established dominance of the hamburger. Branding himself "Colonel Sanders", the founder became a prominent figure of American cultural history, and his image remains widely used in KFC advertising. The company's rapid expansion made it too large for Sanders to manage, so in 1964 he sold the company to a group of investors led by John Y. Brown Jr. and Jack C. Massey.
KFC was one of the first fast-food chains to expand internationally, opening outlets in Britain, Mexico, and Jamaica by the mid-1960s. Throughout the 1970s and 80s, KFC experienced mixed success domestically, as it went through a series of changes in corporate ownership with little or no experience in the restaurant business. In the early 1970s, KFC was sold to the spirits distributor Heublein, which was taken over by the R. J. Reynolds food and tobacco conglomerate, which later sold the chain to PepsiCo. The chain continued to expand overseas, and in 1987 KFC became the first Western restaurant chain to open in China.
In 1997, PepsiCo spun off its restaurants division as Tricon Global Restaurants, which changed its name to Yum! Brands in 2002. Yum! has proven to be a more focused owner than Pepsi, and although KFC's number of outlets has declined in the US, the company has continued to grow in Asia, South America, and Africa. The chain has expanded to 18,875 outlets across 118 countries and territories, with 4,563 outlets in China alone, KFC's largest market.
Origin of Kentucky Fried Chicken (KFC)
Harland Sanders was born in 1890 and raised on a farm outside Henryville, Indiana. His father died in 1895, and to make ends meet his mother took work at a canning plant. As the eldest child at the age of five, Sanders was left to care for his two siblings. When he turned seven, his mother taught him how to cook. After leaving the family home at age 13, Sanders pursued several professions including railroad worker and insurance salesman, with mixed success. In 1930, he took over a Shell filling station on U.S. Route 25 at the point it split into east and west spurs outside North Corbin, a small city on the edge of the Appalachian Mountains. By June, he had converted a storeroom into a small eating area using his own dining table, serving meals such as steaks and country ham to travelers.
In 1934, Sanders took over the lease of the Pure Oil filling station on the other side of the road, due to its greater visibility for motorists. He then began to sell fried chicken. To improve his skills, Sanders took an eight-week restaurant-management course at the Cornell University School of Hotel Administration. By 1936, his business had proved successful enough for him to be given the honorary title of Kentucky colonel by Governor Ruby Laffoon. In 1937, Sanders expanded his restaurant to 140 seats, and in 1940 purchased a motel across the street, the Sanders Court & Café.
Sanders was dissatisfied with the 35 minutes it took to prepare his chicken in an iron frying pan, but he did not want to deep fry. Although a much faster process, in Sanders' opinion it produced dry and crusty chicken that was unevenly cooked. On the other hand, if he prepared the chicken in advance of an order, there was sometimes waste at the end of the day. In 1939, the first commercial pressure cookers were released onto the market, predominantly designed for steaming vegetables. Sanders bought one and modified it into a pressure fryer, which he then used to prepare chicken. The new method reduced production time to be comparable with deep frying, yet, in Sanders' opinion, retained the quality of pan-fried chicken. In July 1940, Sanders finalized what came to be known as his Original Recipe of 11 herbs and spices. Although he never publicly revealed the recipe, he admitted to the use of salt and pepper, and claimed that the ingredients "stand on everybody's shelf".
After being recommissioned as a Kentucky colonel in 1950 by Governor Lawrence Wetherby, Sanders began to dress the part, growing a goatee and wearing a black frock coat (later switching to a white suit), a string tie, and referring to himself as "Colonel". His associates went along with the title change, "jokingly at first and then in earnest", according to biographer Josh Ozersky.
Early franchisees of KFC
The Sanders Court & Café generally served travelers, so when the route planned in 1955 for Interstate 75 bypassed Corbin, Sanders sold his properties and traveled the US to market his chicken concept to restaurant owners. Independent restaurant owners would pay four cents on each chicken sold as a franchise fee (later increased to five cents), in exchange for Sanders' "secret blend of herbs and spices", his recipe and method, and the right to advertise using his name and likeness. In 1952, he had already successfully franchised his chicken recipe to Pete Harman of South Salt Lake, Utah, the operator of one of the most prominent restaurants in the city.
Rodney L. Anderson, a sign painter from Roy, Utah who was hired by Harman, coined the name "Kentucky Fried Chicken". Sanders adopted the name because it distinguished his product from the deep-fried "Southern fried chicken" product found in restaurants. Harman claimed that in his first year of selling "Kentucky Fried Chicken", his restaurant sales more than tripled, with 75 percent of the increase coming from the sale of fried chicken. In Utah, a product from Kentucky was exotic and evoked imagery of Southern hospitality.
As a franchise-led operation, KFC's success depended on the work of the early franchisees. Harman has been described as the "virtual co-founder" of the chain by Sanders' biographer. Harman trademarked the phrase "It's finger lickin' good", which was eventually adopted as a slogan across the entire chain. In 1957, Harman bundled 14 pieces of chicken, five bread rolls and a pint of gravy into a cardboard bucket, and offered it to families as "a complete meal" for US$3.50 (around US$30 in 2014). He first test-trialed the packaging as a favor to Sanders, who had called on behalf of a Denver franchisee who did not know what to do with 500 cardboard buckets he had bought from a traveling salesman.
By 1956, Sanders had six or eight franchisees, including Dave Thomas, who eventually founded the Wendy's restaurant chain. Thomas developed the rotating red bucket sign, was an early advocate of the take-out concept that Harman had pioneered, and introduced a bookkeeping form that Sanders rolled out across the entire KFC chain. Thomas sold his shares in 1968 for US$1 million (around US$7 million in 2013), and became regional manager for all KFC restaurants east of the Mississippi before founding Wendy's in 1969.
In 1956, Sanders moved the company headquarters from Corbin to Shelbyville, Kentucky, which offered superior transport links to distribute his spices, pressure cookers, take-out cartons and advertising material to franchisees.
Sale by Sanders and rapid growth KFC popularized chicken in the fast food industry, diversifying the market by challenging the established dominance of the hamburger. In 1960, the company had around 200 franchised restaurants; by 1963, this had grown to over 600, making it the largest fast food operation in the United States. In 1963, Sanders met John Y. Brown, Jr, a young Kentucky encyclopedia salesman, who explained that he was keen to join the company. Sanders instead proposed the sale of the company, as he lacked an obvious or willing heir among his relatives.
Lacking sufficient funds himself, Brown convinced the Tennessee financier Jack C. Massey to provide 60 percent of the acquisition capital, and provided a major contribution himself, with smaller contributions from franchise holder Pete Harman and company officials Lee Cummings and Harlan Adams. Sanders began to have doubts about selling the company, as some members of his family were against it. Massey, knowing that Sanders believed in astrology, chose a day when Sanders's horoscope would be unusually positive to make a written offer. After checking his horoscope, Sanders accepted. The group acquired the company in 1964 for US$2 million (around US$15 million in 2013). The contract included a lifetime salary for Sanders and the agreement that he would be the company's quality controller and trademark.
Massey and Brown introduced standardization to the fragmented company. After visiting Pete Harman's operations in Utah, they began to implement the stand-alone take-out model across the entire chain. Franchisees were ordered to delist their own menu items so that they could concentrate on KFC products. The restaurants were re-branded with a distinctive red-and-white striped color pattern and mansard roofs with cupolas. The roll-out of freestanding stores accelerated the company's growth as outlets exclusively selling fried chicken proved to be more appealing to potential franchisees.
Despite selling the company, Sanders retained significant moral authority over executives and franchisees and made his feelings clear when he disagreed with corporate decisions. When Massey moved company headquarters from Kentucky to Nashville, Tennessee, Sanders was quoted as saying, "This ain't no goddam Tennessee Fried Chicken, no matter what some slick, silk-suited son-of-a-bitch says". He believed that the company had reneged on their contract with him when they opened operations in Canada, arguing that the contract had granted him the exclusive rights to operate there. KFC was forced to renegotiate with Sanders regarding the Canadian activities, as he owned $1.5 million worth of stock and was using it to prevent Massey from listing the company publicly until his points of issue were addressed. Brown and Massey claimed that Sanders only had the rights to process chicken in Canada. After they renegotiated the contract to guarantee Sanders exclusive rights over Canada, he sold his stock to them, and the company went public in 1966. After going public, the company bought out its 600 franchisees and directly operated them itself. Later that year, Massey resigned from day-to-day management of the company (although he remained as chairman), and Brown relocated company headquarters to Louisville, Kentucky.
KFC had become the sixth largest restaurant chain in the US by sales volume by 1967, and 30 percent of sales were take-out. Brown felt that the company had to expand quickly, or else emerging rivals such as Church's Chicken would steal the company's lead; 863 outlets were opened in 1968. The company's growth pushed its stock value to "stratospheric" levels, according to Reuters, and in 1969 it was listed on the New York Stock Exchange. Meanwhile, KFC entered into ventures with other companies. Brown believed that the Colonel Sanders brand could be used to market anything, and launched the "Kentucky Roast Beef" restaurant chain, and "Colonel Sanders Inns" motels. The two ventures quickly failed. That same year, KFC entered into a joint venture with the California-based fish and chips chain H. Salt Esq. Fish & Chips, which proved more successful, although the stake was ultimately divested in 1987.