STRATEGIC PARTNERS
September 20, 2010
A conflict that has been brewing since January between Kentucky Fried Chicken and a group of its franchisees is finally going to court.
KFC National Council and Advertising Cooperative Inc., which represents KFC franchise owners in the company's marketing decisions, originally filed suit with KFC because of its advertising shift toward the chain's grilled chicken line.
When the grilled chicken line was originally launched in May 2009, it became the primary focus of marketing efforts, including the "Grill Baby Grill" ads. But the group of franchisees said in its suit that this shift ignored their input to keep the spotlight on the company's fried Original Recipe or Extra Crispy chicken products, which ultimately hurt business.
KFC's parent company, Yum! Brands, has called the lawsuit baseless.
However, the case has now moved into a Delaware courtroom to decide who has the ultimate authority to make decisions about KFC's marketing initiatives, according to Bloomberg.
The KFC National Council and Advertising Cooperative, which represents more than 80 percent of KFC franchises in the United States, filed papers with the court claiming that KFC corporate "has recently taken the position that KFC Corp. has the sole authority" to direct advertising, and that franchisees who refuse to cooperate could face "personal liability."
The non-jury trial began Monday. The case is KFC National Council v. KFC Corp., CA5191, Delaware Chancery Court, in Wilmington.
