Wagnabbit: Rise of ‘Kentucky Fried Chicken’ is franchising case study

Colonel Harland Sanders was in his early 60s in 1952 when he began enlisting fast-food franchisees to sell his famous “Kentucky Fried Chicken.”

He was successful, and by 1964, more than 600 KFC franchises were operating in the United States and Canada. Colonel Sanders figured it was time to sell the company…and kick back.

He accepted a $2 million offer from a group of investors, led by John Young Brown Jr., who would become governor of Kentucky, and Jack Carroll Massey, a venture capitalist and entrepreneur.

John Young Brown Jr. with Colonel Sanders

Jack Carroll Massey

But as part of the deal, they insisted that Colonel Sanders (at age 74) continue as “brand ambassador” and visit KFC restaurants to “ensure the quality and consistency” of his treasured fried chicken secret recipe.”

Colonel Sanders was still going strong in 1971 when KFC became part of Heublein Inc., known primarily as a producer and distributor of alcoholic beverages.

Colonel Sanders accused the new owners of being “boozehounds” and ruining KFC’s gravy.

He was always fussy about the quality of all the food served in KFC restaurants, and he harshly criticized Heublein for turning his mashed potato gravy into “sludge” that had less flavor than “wallpaper paste.”

Goodness gracious. Legal fireworks ensued, beginning in 1973, with Colonel Sanders and Heublein duking it out. Heublein sought to block Colonel Sanders and his wife, Claudia, from operating a competing restaurant in Shelbyville, Ky., known as the “Colonel’s Lady Dinner House.”

Heublein settled out of court in 1975, paying Colonel Sanders and his wife $1 million, continuing his salary as KFC’s goodwill ambassador and allowing the new venture to go forward as the “Claudia Sanders Dinner House.”

In exchange, Colonel Sanders (now 85), agreed to give the Heublein executives “a cooking lesson.” A staff writer with The New York Times reported that Colonel Sanders cooked “as good a chicken as I ever ate.”

“I proved to them that it could be done,” said the Colonel. “They were just as interested in quality as I was but didn’t know how to go about it.”

Colonel Sanders, who suffered from acute leukemia, died of pneumonia in 1980, at age 90.

One of Colonel Sanders’ disciples who advanced through the ranks in the restaurant industry was Rex David Thomas, founder of Wendy’s Old Fashioned Hamburgers in 1969 in Columbus, Ohio.

Dave Thomas was an ordinary teenager working a busboy at the Hobby House restaurant in Fort Wayne, Ind., in 1950, when the Korean War began. He enlisted in the Army at age 18.

Officers took note of Thomas’ food service background. He received specialized training to become a mess sergeant and was deployed to West Germany, where he was responsible for the daily meals of 2,000 soldiers.

After his discharge in 1953, Thomas returned to Fort Wayne and the Hobby House where he quickly worked his way up the ladder to become the restaurant’s assistant manager.

In 1956, Hobby House president Phil Clauss entered into a KFC franchising agreement with Colonel Sanders.

In 1962, Clauss asked Thomas, who had risen to become a Hobby House vice president, to return to the trenches and revive four Kentucky Fried Chicken outlets in Columbus that were struggling financially.

Thomas made drastic changes right away, including paring down the menu to exclusively feature fried chicken. The stores were short on cash to advertise, so Thomas traded barrels of fried chicken for promotions of “KFC” on local radio and television stations.

Soon, Thomas had expanded the operation of four faltering stores to eight successful ones…and he achieved “rock star status” in the eyes of Colonel Sanders. They became lifelong friends.

Melinda Lou “Wendy” Thomas-Morse, the fourth child of Dave and Lorraine Thomas, is the namesake of the “Wendy’s” brand. She continues as the company spokesperson.

Kentucky Fried Chicken was an early client of the Lippincott & Margulies advertising agency in New York City, formed by J. Gordon Lippincott and Walter P. Margulies. The agency created the original logo for Kentucky Fried Chicken in 1952. It was redesigned (shown below) in 1978.