Assignment on

KFC’s Business Operation and Its Social

Responsibilities

PREPARED FOR:

Md. Zahidul Islam

Assistant professor, Faculty of Business

ASA University Bangladesh

PREPARED BY:

Mostafizur Rahman 071-12-422

Foyad Hossain Khan 071-12-452

Mohammad Rubayat Ahmed 071-12-425

Md.Nurul Islam 071-12-447

Abu MD. Zakaria 071-12-454

DATE OF SUBMISSION

August 23, 2009

Acknowledgement

To prepare our assignment, we are grateful to a large sum of people. Their insights, advice and

suggestions have helped us to improve our text and made it even more valuable and user friendly. We

are extremely grateful to, Md. Zahidul Islam, Lecturer ,Faculty of business, ASA University, our

course teacher, for his cordial co-operation and spending valuable time for us. Thank you all for their

advice, time, and assistance.

25 August, 2009

Md. Zahidul Islam

Course Teacher

Social Science

ASA University Bangladesh

Dear Sir,

SUBMISSION OF GROUP REPORT

We have the pleasure to submit the group report on “KFC’s Business Operation and Its Social

Responsibilities”. It is a matter of immense pleasure for us to have the opportunity to analyze the

“KFC’s Business Operation and Its Social Responsibilities”. We are grateful to you for allowing us to

carry out such project work. We are also grateful to you for necessary co-operation and assistance

from you during our assignment. We believe that the knowledge and experiences acquired while

conducting this study will help us in many ways and the readers as well in future.

We tried our best to accommodate our ideas and findings as specifically as you asked about within the

time frame and resources available. We hope that the idea presented in the report will provide a clear

picture of “KFC’s Business Operation and Its Social Responsibilities”. We would like to mention that

there might be some errors in the report that is totally unintentional and due to professional hazard. We

believe that you will consider such shortcomings while you evaluate the report.

Sincerely yours,

Mohammad Rubayat Ahmed

Md. Nurul Islam

Md.Foyad Hossain Khan

Mostafizur Rahman

Abu Md.Zakaria

Introduction:

KFC Corporation, based in Louisville, Ky., is the world's most popular chicken restaurant chain

specializing in Original Recipe®, Extra Crispy™ and Colonel's Crispy Strips® with home-style sides,

Honey BBQ Wings, and freshly made chicken sandwiches. There are more than 14,000 KFC outlets in

more than 80 countries and territories around the world, serving some 12 million customers each day.

KFC Corporation is a subsidiary of Yum! Brands, Inc., Louisville, Ky. KFC is a brand and operating

segment, called a "concept", of Yum! Brands since 1997. when that company was spun off from

PepsiCo as Tricon Global Restaurants Inc.

The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952, though

the idea of KFC's fried chicken actually goes back to 1930. The company adopted the abbreviated

form of its name in 1991. Starting in April 2007, the company began using its original name, Kentucky

Fried Chicken, for its signage, packaging and advertisements in the United States as part of a new

corporate re-branding program; newer and remodeled restaurants will have the new logo and name

while older stores will continue to use the 1980s signage. Additionally, Yum! continues to use the

abbreviated name freely in its advertising.

KFC HISTORY, MISSION, AND VISION

Since the 1950's, KFC has grown at a remarkable pace from one small roadside restaurant, to an

internationally renowned restaurant chain - the largest chain of chicken restaurants in the world. None

of this would have happened had it not been for the persistence of one man - Colonel Harland D

Sanders. The Colonel was born in 1890 and was only six when his father died and his mother had to go

out to work to support the family. He became a dab - hand at cooking for the family and was soon

preparing a wide range of regional dishes.

It was at the age of 40 working as a service station operator in Corbin, Kentucky, that the Colonel

returned to his love of cooking and began to serve food to hungry travellers from his own living

quarters. Before long customers were turning up for food alone, so he moved across the street to a

motel and 142 seater restaurant which he named "Sanders". It was during this time that the Colonel

devised his recipe for fried chicken using a secret blend of eleven Herbs and spices. His restaurant

became so popular the state governor made Harland Saunders a Kentucky Colonel in honour of his

fine contribution to state cuisine!

But it wasn't the true start of KFC, as they know it. In the early 1950's a new by-pass signaled the end

of the Colonels business, and he auctioned off his operations. But he wasn't about to give it all up that

easily. Using his last $105 Social Security check he set up Kentucky Fried Chicken, his own chicken

franchising business, traveling across the country from restaurant to restaurant cooking chicken for the

owners and their employers. Following the owners' approval of his special KFC recipe, Colonel

Sanders entered upon a handshake agreement, which provided him with a nickel for every chicken the

restaurant sold.

His recipe and policy met with stupendous success. Fried chicken itself was not a new concept, but the

unusual combination of Herb's and spices, which made up the Colonel's chicken coating, became the

star attraction. By 1964 Colonel Sanders had over 600 franchised outlets of his chicken product in the

United States and Canada producing a $37 million turnover. The first Kentucky Fried Chicken

restaurant was introduced to Britain in 1965.

By now the Colonel was in his seventies and the business was getting too big for him. So he hung up

his cooking-cap in 1964 and sold the company. As part of the deal, he agreed to remain a lifelong

quality controller and his famous face was also used as the company trade mark.

Source: http://www.premier-recruit.com/kfc.

The Colonel died in 1980. He was 90 years old. In the latter years of his life he traveled 250,000 miles

a year overseeing his KFC Empire. He was always keen to roll up his sleeves, don an apron and

demonstrate to staff how real 'finger lickin' good' fried chicken should be made. He always insisted on

the highest standards of quality, service and hygiene, and those standards have continued to this day.

KFC, the world's largest chain of chicken restaurants, offers great tasting meals and snacks in over

30,000 restaurants around the world. There are KFC restaurants in more than 74 countries, from a

Chinese village near the Great Wall, to the busting boulevards of down town Paris and the sunny

streets of Puerto Rico.

Every day over 6.5 million people make KFC part of their lives. Laid head to claw, KFC chickens

consumed worldwide would stretch 458,065 kilometers and would circle the earth at the equator 11

times.

Chicken is their business, but innovation and customer satisfaction is their passions. This shows in

their results. In 2001, KFC enjoyed $9.7 billion in system sales world side. KFC has added a variety of

burgers to the menu, customers flocked to try the Hot n' Spicy Zinger burger, the Tower burgers and

the Twister. KFC is a great believer in developing new products that meet the high standards set by the

Colonel all those years ago. They have a variety of products that are being tested in parts of the UK -

and we've got more new products in the pipeline for 2002 and beyond.

KFC serves 2.5 billion meals a year worldwide and they employ more than 200,000 people worldwide.

KFC opens one restaurant everyday round the world. They are also changing the way they bring their

products to customers. In Puerto Rico and California, for example, university students now enjoy KFC

meals as part of their regular campus food. And in a growing number of cites around the world from

Auckland to Alberqurque, KFC can be delivered direct to customers' homes.

And it all began with a 65-year-old gentleman who used his $105 Social Security cheque to start a

business.

Source:http://www.premier-recruit.com/kfc.

KFC’s strategy:

CHAMPS support their belief that the most important thing each of themcan do is focus

on the customer. It demonstrates their commitment to be the most respected restaurant

brand in the world with the world's best restaurant operations.

They asked their customers what they wanted from themin terms of service, food and

experience. This is what they told us;

The restaurant should be clean C

The team should be hospitable H

The order should be accurate A

The restaurant should be well maintained M

The product should be consistently great P

The food should be served with speed S

As they are committed to continually exceeding their customers' expectations they

regularly monitor how they are doing. They do this by way of an agency that employs

Mystery Customers to help show their store teams how typical customers feel about their

store. This is known as the CHAMPS Check. They use the reports from these customers

to take action so that improvements can be made.

Their focus is to treat all their customers as they would guests in their own homes, that is

welcome them, put them at ease, make sure we've cleaned and tidied up! look after them,

and what's more does that little bit extra so that they'll remember themand want to come

back.

Customer Mania

KFC are passionate and committed to 'wowing' their customers. They want to treat their

customers so well they come back again and again, and they want them to tell their

friends to visit too!

Source: http://www.premier-recruit.com/kfc.

Customer Mania involves each of themthinking about what their customer wants, and

then exceeding their expectations. It is an attitude and set of behaviors that puts the

customer at the centre of everything they do.

Customer Mania is about delivering 100% CHAMPS with a Yes!

Yes! - My customer is my job

Yes! - I only serve hot, fresh, great tasting food

Yes! - My customers are important to me

Yes! - Solving my customer's complaint is my role

To achieve 100% CHAMPS with a Yes! KFC believe all employees should follow the

'SMILE - You're on stage' program.

S Stand up straight, don't lean

T Turn to face your customer

A Act on what your customer wants

G Great your customer like they are your friend

E Eye contact!

RECOGNITION AND ACHIEVEMENT

They find reasons to celebrate the achievements of others and have fun doing it!

They have various means of recognizing people in their work. These range from informal

team recognition, which you will experience within your team, to the more formal

awards:

Walking the Talk

An informal award given to someone for displaying the How They Work Together

principles. Anyone can award a Walk the Talk card, which you can get from each floor in

the RSC. You can hand the card to individual or you can place it on Walk the Talk board.

Use it as a way to say "thanks".

Restaurant Excellence

Awarded for outstanding support to the stores, by the Company Operations Director,

Dray Willson-Rymer.

Putting People First

Awarded for outstanding performance in the areas of Recruitment and Retention,

Training and Development, and Reward and Recognition, by the HR Director, Alison

Preen.

Gold Standard

Awarded for outstanding performance demonstrating the How They Work Together

principles.

Will you be recognized soon?

BE PROUD OF OUR:

Food: No one beats themon chicken. Cooked and prepared in store as only they know

how, the best way - the KFC way. It has to be the best every time.

Restaurants: Modern, up to date and appealing facilities, which are in the right place for

their customers? This also means a better, safer work environment for you.

Service: They delight their customers so much they tell their friends. Their service will

be faster and friendlier than any of their competitors. No one will come close. We'll

deliver the best restaurant experience.

Source: http://www.premier-recruit.com/kfc.

Branding: They want advertising that is talked about, impact and lasting. Whatever the

advertising medium the message remains the same, KFC means great tasking food at

unbeatable value, and a great customer experience.

Culture: They aim to create an environment where everyone can make a difference. It's

not just about results but how they achieve them. Anyone can be successful at KFC as

long as they demonstrate the passion and commitment to succeed.

Products

Menu items

This is a list of menu items sold at KFC.

Chicken

KFC's Original Recipe fried chicken and French fries

KFC's specialty is fried chicken served in various forms. KFC's primary

product is pressure-fried pieces of chicken made with the original recipe. The

other chicken offering, extra crispy, is made using a garlic marinade and

double dipping the chicken in flour before deep frying in a standard industrial

kitchen type machine.

Kentucky Grilled Chicken - This marinated grilled chicken is targeted towards

health-conscious customers. It features marinated breasts, thighs, drumsticks,

and wings that are coated with the Original Recipe seasonings before being

grilled. It has less fat, calories, and sodium than the Original Recipe fried

chicken. Introduced in April 2009.

KFC has two lines of sandwiches: its "regular" chicken sandwiches and its

Snackers line. The regular sandwiches are served on either a sesame seed or

corn dusted roll and are made from either whole breast fillets (fried or

roasted), chopped chicken in a sauce or fried chicken strips. The Snackers line

are value priced items that consist of chicken strips and various toppings. In

the UK, Australia and New Zealand, sandwiches are referred to as "burgers";

there is the chicken fillet burger (a chicken breast fillet coated in an original-

recipe coating with salad garnish and mayonnaise) and a Zinger Burger (as

with the former but with a spicier coating and salsa). Both of these are

available as "tower" variants, which include a slice of cheese and a hash

brown.

A variety of smaller finger food products are available at KFC including

chicken strips, wings, nuggets and popcorn chicken. These products can be

ordered plain or with various sauces, including several types of barbecue

sauces and buffalo sauce. They also offer potato wedges.

Several pies have been made available from KFC. The Pot Pie is a savory pie

made with chicken, gravy and vegetables. In the second quarter of 2006, KFC

introduced its variation on Shepherd's pie called the Famous Bowl. Served in

a plastic bowl, it is layered with mashed potatoes or rice, gravy, corn, popcorn

chicken, and cheese, and is served with a biscuit. The bowl had been available

at KFC's special test market store in Louisville since the third quarter of 2005.

The KFC Twister is a wrap that consists of either chicken strips or roasted

chicken, tomato, lettuce and (pepper) mayonnaise wrapped in a tortilla. In

Europe, the Twister is sold in two varieties: 1) the Grilled Twister (chicked

strips), and 2) the Grilled Mexican twister/Spicy Toasted Twister (UK)

(chicken breast supplemented by tortilla chips and salsa, UK: adds only salsa

to pepper mayonnaise),

KFC Fillers are a 9" (22 cm) sub, available in four varieties over the summer

period in Australia.

Shish kebab - in several markets KFC sells kebabs.

Source: en..wikipedia.org/wiki/KFC

Advertising Policy of KFC

Early television advertisements for KFC regularly featured Colonel Sanders licking his

fingers and talking to the viewer about his secret recipe. Despite his death in 1980

Sanders remains a key symbol of the company in its advertising and branding.

Throughout the mid 1980s, KFC called on Will Vinton Studios to produce a series of

humorous, claymation ads. These most often featured a cartoon-like chicken illustrating

the poor food quality of competing food chains, mentioning prolonged freezing and other

negative aspects. TV ads also featured Foghorn Leghorn advising Henry Hawk to visit

the restaurant for better chicken.

In the 80s, KFC was an associate sponsor for Junior Johnson's NASCAR Winston Cup

Series cars, with such drivers as Darrell Waltrip, Neil Bonnett, and Terry Labonte.

In 1997 KFC briefly re-entered the NASCAR Winston Cup Series as sponsor of the #26

Darrell Waltrip Motorsports Chevrolet with driver Rich Bickle at the Brickyard 400.

By the late 1990s, the stylized likeness of Colonel Sanders as the KFC logo had been

modified. KFC ads began featuring an animated version of "the Colonel" voiced by

Randy Quaid with a lively and enthusiastic attitude. He would often start out saying "The

Colonel here!" and moved across the screen with a cane in hand. The Colonel was often

shown dancing, singing, and knocking on the TV screen as he spoke to the viewer about

the product.

The animated Colonel is uncommon today. Still using a humorous slant, the current KFC

campaign revolves mostly around customers enjoying the food. It also features a

modified version of Lynyrd Skynyrd's "Sweet Home Alabama" as the theme song for

practically all its commercials, though the restaurant actually hails from Kentucky.

In 2006, KFC claimed to have made the first logo visible from outer space, though

Readymix has had one since 1965. KFC says "It marked the official debut of a massive

global re-image campaign that will contemporize 14,000-plus KFC restaurants in over 80

countries over the next few years." The logo was built from 65,000 one-foot-square tiles,

and it took six days on site to construct in early November. The logo was placed in the

Mojave Desert near Rachel, Nevada. It is located in the northern section of Rachel,

Nevada at 37.6460°N 115.7507°W .

Many KFC locations are co-located with one or more of Yum! Brands restaurants, Long

John Silver's, Taco Bell, Pizza Hut, or A&W Restaurants. Many of these locations

behave like a single restaurant, offering a single menu with food items from both

restaurants.

One of KFC's latest advertisements is a commercial advertising its "wicked crunch box

meal". The commercial features a fictional black metal band called "Hellvetica"

performing live, the lead singer then swallows fire. The commercial then shows the lead

singer at a KFC eating the "wicked crunch box meal" and saying "Oh man that is hot".

In 2007, the original, non-acronymic Kentucky Fried Chicken name was resurrected and

began to reappear on company marketing literature and food packaging, as well as some

restaurant signage.

Trademark disputes

In 1971, Sanders sued Heublein Inc., KFC's parent company at the time, over the alleged

misuse of his image in promoting products he had not helped develop. In 1975, Heublein

Inc. unsuccessfully sued Sanders for libel after he publicly referred to their gravy as

"sludge" with a "wallpaper taste".

In May 2007 KFC (Great Britain) requested that Tan Hill Inn, in the Yorkshire Dales,

North Yorkshire, UK refrain from using the term 'Family Feast' to describe its Christmas

menu, although this problem was quickly resolved with the pub being allowed to

continue use of the term.

Wages and working conditions

Like many fast food outlets, KFC employs a high proportion of young, unskilled workers,

at or just above minimum wage, and its workers are not unionized. In New Zealand, KFC

youth workers earn NZ$10.13 an hour. Staff at the Balmoral, Auckland store went on

strike for two hours on December 3, 2005 after Restaurant Brands, the franchise holder,

offered no wage increase in contract negotiations.In March 2006, Restaurant Brands

agreed to phase out youth rates in New Zealand, although no date was set.

Many stores in western Canada are unionized with the Canadian Auto Workers, and as a

result many non-franchise stores in western Canada pay higher than minimum wage.

Social Responsibility of KFC: KFC is in field with there social responsibilities.

They are doing various social responsibilities like,

Colonel’s Scholars Program

The KFC Colonel's Scholars Program is looking for high school seniors with

entrepreneurial drive, strong perseverance, demonstrated financial need, and who want to

pursue a college education at an accredited public institution in the state they reside.

The KFC Colonel’s Scholars Program is about you, your dreams and aspirations, and the

perseverance to succeed. This program is offered to high school seniors planning to

attend a public in-state college or university. Students who meet the criteria may apply

online to become a KFC’s Colonel’s Scholar. Students selected for this scholarship are

eligible to receive up to $20,000 to complete a bachelor’s degree program

Source: http://www.kfc.com/about/responsibility.asp

Global Diversity

For us, diversity is not a target - it's a way of life and a way of doing business. Everyone

can and does make a difference in our organization. One of our HWWT2 principles -

Believe in all People - underscores the importance of actively seeking diversity in others;

believing everyone has the potential to make a difference; and coaching and supporting

every individual to grow to their full capacity. This adds perspective and depth to

everything we do. We've also found that a diverse team makes for better problem solvers,

services all our customers more effectively, and creates a richer culture for all of themto

enjoy.

In our company-owned operations in the U.S. for example, about 30 percent of our

associates are Caucasian and the remaining 70 percent are Hispanic, African American

and/or Asian. Minorities and women made up 64 percent of our external management

hires and 41 percent of internal management hires (promotions) in 2007.

We are also increasing the representation of African Americans, Hispanics and women

among our key talent/decision makers, and growing the pipeline of diversity in our mid-

level manager ranks.

Supplier Code of Conduct:

Audits and Inspections

Each Supplier should conduct audits and inspections to insure their compliance with this

Code and applicable legal and contractual standards. In addition to any contractual rights

of Yum or Unified Foodservice Purchasing Co-op, LLC ("UFPC"), the Supplier's failure

to observe the Code may subject them to disciplinary action, which could include

termination of the Supplier relationship. The business relationship with Yum and UFPC

is strengthened upon full and complete compliance with the Code and the Supplier's

agreements with Yum and UFPC.

Source: http://www.kfc.com/about/responsibility.asp

Application

The Code is a general statement of Yum's expectations with respect to its Suppliers. The

Code should not be read in lieu of but in addition to the Supplier's obligations as set out

in any agreements between Yum or UFPC and the Supplier. In the event of a conflict

between the Code and an applicable agreement, the agreement shall control.

Animal Welfare Program:

Yum! Brands is the owner of restaurant companies and, as such, does not own, raise or

transport animals. However, as a major purchaser of food products, we have the

opportunity, and responsibility, to influence the way animals supplied to us are treated.

We take that responsibility very seriously, and we are monitoring our suppliers on an

ongoing basis to determine whether our suppliers are using humane procedures for caring

for and handling animals they supply to us. As a consequence, it is our goal to only deal

with suppliers who promise to maintain our high standards and share our commitment to

animal welfare.

To assist us in that effort, Yum! Brands formed the KFC Animal Welfare Advisory

Council, which consists of highly regarded experts in the field. The Council provides us

with information and advice based on relevant data and scientific research. The Animal

Welfare Advisory Council has been a key factor in formulating our animal welfare

program.

Source: http://www.kfc.com/about/responsibility.asp

KFC Controversy

The controversy of KFC is just visible. The way of operation of KFC is not out of

question. It is facing lots of campaign against its way of selecting chicken to making it

fried. There are few examples given below,

PETA's Campaign Against KFC

KFC suppliers cram birds into huge waste-filled factories, breed and drug them to grow

so large that they can’t even walk, and often break their wings and legs. At slaughter, the

birds’ throats are slit and they are dropped into tanks of scalding-hot water—often while

they are still conscious. It would be illegal for KFC to abuse dogs, cats, pigs, or cows in

these ways.

KFC’s own animal welfare advisors have asked the company to take steps to eliminate

these abuses, but KFC refuses to do so. Many advisors have now resigned in frustration.

An Undercover investigation:

Every time undercover investigators enter the facilities of KFC’s suppliers, they find

hideous abuse and suffering. At one KFC “Supplier of the Year” slaughterhouse in West

Virginia, workers were caught tearing birds’ heads off, ripping them apart, spitting

tobacco into their eyes, spray-painting their faces, and throwing them against walls—all

while the birds were still conscious and able to feel pain. This is in stark contrast to

KFC’s claim that it “only deal[s] with suppliers who promise to maintain our high

standards and commitment to animal welfare.”

Some of the largest and most respected newspapers in the United States, Canada, Europe,

and Australia have written scathing editorials decrying the conditions at these facilities,

and customers have spoken with their wallets, turning away from KFC in droves as they

learn about the hideous ways that the more than 850 million chickens who end up in

KFC’s buckets each year are abused.

The investigations detailed below prove that KFC desperately needs to adopt the

recommendations of its animal welfare advisors (five of whom have quit in recent years

after KFC refused to listen to their advice) to eliminate at least the very worst abuses that

chickens suffer for KFC.

US: KFC faces suit over cooking fats

A News item from Business Respect, Issue Number 97, dated 15 Jun 2006

Fast food chain KFC is being sued for cooking its fried chicken in oil containing trans

fatty acids which have been linked to raised cholesterol.

The suit, which is being brought by the Center for Science in the Public Interest, has been

dismissed as 'frivolous' by the company. The suit's stated aim is to force KFC to either

themdifferent types of oil or to ensure that customers are informed about the dangers of

the fat content.

KFC says it has provided nutritional information on its products for a long time, and it

provides a wide variety of choices for customers. It has been reviewing options on oils,

but has yet to find a solution that preserves flavour and meets other practical criteria.

KFC targeted by animal welfare campaign

PETA argues that KFC "continues to support the worst abuse of chickens", adding that

"the corporate has shown no willingness even to consider eliminating the most egregious

abuses". The organisation has launched a campaign website urging its supporters to

leaflet and demonstrate at KFC stores.

The company said that it engaged outside experts to conduct regular unannounced audits

at its poultry suppliers to ensure full compliance with the company's Animal Welfare

Policy.

"KFC is committed to the well–being and humane treatment of broiler chickens," said Dr.

Joanne Plichta, Vice President, Research and Development, KFC Corporation. "Our

Animal Welfare Council has established a set of quantifiable guidelines that have been

Source: http://www.mallenbaker.net/csr/page.php?Story_ID=1661

implemented in their supplier processing facilities. The experts on their council have also

reviewed several PETA proposals and determined that the majority of them are

impractical and not based on sound science."

http://www.businessrespect.net/page.php?Story_ID=762

Conclusion:

In conclusion, KFC offers gorgeous chicken with a wide variety of meal choices

including great family meals, and the service is usually fine. Value for money is given,

too, so the only real problem is that KFC’s price is not sufficient. We recommend KFC to

anyone and everyone – you will not be disappointed. Oh by the way, if you don’t like

chicken, forget it. I think that, in the same way that KFC have led on using healthier oils,

if they, as one of the largest purchasers of chickens that there is, decided to introduce

better welfare standards, it would boost the free range and ethical meat industry

massively. They have that in their power. They could even take a partial step by making

available a free range option whilst upgrading the rest to something more welfare

friendly.

Reference

1. http://www.dooyoo.co.uk/restaurants-cafes-national/kentucky-fried-chicken-kfc/

1115002/

2. http://www.businessrespect.net/page.php?Story_ID=762

3. http://www.mallenbaker.net/csr/page.php?Story_ID=1661

4. http://www.kfc.com/about/responsibility.asp

5. http://www.premier-recruit.com/kfc.