KFC marks 50th anniversary
United States (Aug. 09, 2002 - 05:00)
LOUISVILLE, Ky. (AP) -- Pete Harman was building a successful burger business in Utah when a white-haired, goateed acquaintance from Kentucky showed up unexpectedly and offered to cook a fried chicken dinner.
Colonel Harland Sanders had a business proposition. He was certain that one helping of his specialty chicken, coated with a blend of 11 herbs and spices, would persuade Harman to add chicken to his menu.
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Harman was hooked after a few bites. Soon, his restaurant was promoting the dish, called Kentucky Fried Chicken.
The chicken became an instant hit in that August of 1952 as customers lined up outside the Salt Lake City eatery to take home dinners by the bucketful. For $3.50, they got 14 pieces of chicken, mashed potatoes, rolls and gravy.
"We couldn't cook the chicken fast enough," Harman said.
From humble beginnings, Kentucky Fried Chicken became a fast-food staple and its originator one of the world's most recognizable faces.
Facts about KFC
-- Headquarters: Louisville, Ky.
-- Total restaurants: 11,815 worldwide, including 5,399 in the United States and 6,416 abroad
-- Annual retail sales: $9.7 billion (US)
-- Employees: 245,000 worldwide, both corporate and franchise
-- Nearly 8 million customers served daily
Fifty years later, the chain built on Sanders' salesmanship and homestyle cooking boasts nearly 12,000 restaurants worldwide generating sales of nearly $10 billion a year.
"It's really one of the great American entrepreneurial stories," said John Y. Brown Jr., who took the company's reins from the colonel.
For Sanders, success was a long time coming. He drifted from job to job, including stints as a railroad fireman, insurance salesman, steamboat ferry operator, tire salesman and service station operator. He perfected his chicken and the cooking technique in the late 1930s while serving hungry customers who stopped at his service station -- now a historic landmark in Corbin, Ky. The title "colonel" was an honorific bestowed on Sanders by a Kentucky governor.
Sanders decided to take his chicken from a handful of local restaurants to a national stage at the age of 62, a time when most people are thinking of retiring.
He crisscrossed the country by car, his cookware and herbs and spices in the back, to whip up batches of chicken for restaurateurs and their employees. The demonstrations sealed many handshake deals in which restaurant operators agreed to pay Sanders a nickel for each chicken sold.
"He was just a super salesman," Harman said in a telephone interview.
By 1964, Sanders had signed up more than 600 franchised outlets when he sold the company for $2 million to a group headed by Jack Massey and Brown, who later became governor of Kentucky.
Kentucky Fried Chicken took flight under Brown and his partners. By 1971, when they sold the company for $285 million to Heublein Inc., it had more than 3,500 franchised and company-owned restaurants.
Brown attributed the company's success to its emphasis on take-home dinners that resembled the kind mother made, a revolutionary concept in the restaurant industry.
"It was so exciting," Brown said. "You could just feel the electricity in the air. His chicken was so good, you couldn't mess it up."
The company also capitalized on Sanders' popularity. The colonel always looked the part of the Southern gentleman, wearing his trademark white suit and black string tie while pitching chicken or dishing out homespun wisdom on television shows.
Sanders stayed on as company spokesman, promoting the chicken in folksy television commercials, until his death in 1980 at the age of 90.
KFC changed hands a few more times. It became a subsidiary of R.J. Reynolds Industries -- later RJR Nabisco -- when Heublein sold it in 1982. PepsiCo acquired KFC from RJR Nabisco in 1986 for about $840 million.
In 1997, PepsiCo's three fast-food restaurant chains -- KFC, Taco Bell and Pizza Hut -- spun off to form Tricon Global Restaurants Inc. This year, Louisville-based Tricon changed its name to Yum! Brands Inc.
"They're gaining momentum, certainly," said Howard W. Penney, analyst with SunTrust Robinson Humphrey. "Part of that is due to the dual branding strategy" where YUM! is combining two of its brands under one roof.
Yum! Brands currently are trading for about $28 on the New York Stock Exchange. Penney said he estimated the stock to be worth $40 in 2003.
"They have become more than just a chicken on the bone restaurant company," said Mitchell J. Speiser, an analyst with Lehman Brothers, noting the popularity of KFC's wings and strips and sandwiches.
"They really have done well within fast-food," he added.
As the company's first franchisee, Harman and his wife, Arline, became privy to the colonel's secret blend of herbs and spices, an enduring culinary secret that gives the brand a mystique.
The recipe itself is locked in a vault at KFC headquarters. Only a handful of people know the ingredients and are sworn to secrecy.
As for the company's enduring success, Harman said "the most important thing was the recipe and the product." Harman, now in his 80s, and his wife own 307 KFC stores in Utah, Colorado, Washington state and California.
"We put a lot of effort into anything we did," Harman said. "Some of the things worked. We've done pretty good all along."
Cheryl Bachelder, KFC's president and chief concept officer, is a one-time pizza executive who arrived at KFC about 18 months ago. She said Sanders' legacy remains a chief motivator.
"I love the high standards the colonel set for us," she said. "I think it's the reason we will excel for a long, long time." |
