Marietta, GA - KFC is The Big Chicken - literally.
Just head to the famous metro Atlanta landmark of the same name. There, towering 56 feet tall, eyes rolling and beak flapping open and shut, The Big Chicken marks the spot of a busy restaurant - and at the same time, symbolizes continued domination of the fast-food chicken industry by KFC.
But while their combined sales don't nearly total even half of KFC's $8 billion-plus annually, three Atlanta-based companies are pecking at the claws of the Kentucky-born chicken chain.
AFC Enterprises, which owns Churchs Chicken and Popeyes restaurants; Chick- fil-A; and RTM Restaurant Group, which has Mrs. Winner's and Lee's Famous Recipe Chicken, all are expanding their fast-food chicken businesses - and offering fans a big brood of variety.
From the corner where the Big Chicken resides, a chicken diner can cross the road to find on the other side a Chick-fil-A restaurant, or cross the other way to get to a Churchs Chicken a few yards away. And at an intersection less than a mile away is a Mrs. Winner's.
The three companies say they're growing because of a steady trend toward chicken over red meat and the way chicken lends itself to a range of flavorful preparation, from grilled to roasted to fried as spicily as you can handle.
They savor their neighborly rivalries.
“It's a friendly competition,” said Frank Belatti, AFC Enterprises chief, who admits he sometimes wears a tie given him by Chick-fil-A founder Truett Cathy featuring Cathy's “Eat Mor Chikin” advertising cows. “It's one thing to be competing in a category that's shrinking, and another to be competing when it's growing globally.”
So while friendly, the three privately held companies are aggressively seeking bigger slices of the chicken pot-pie.
And each company is following its own distinct path:
AFC, founded in 1992 as America's Favorite Chicken Co., has battled its way out of debt with a management team that espouses a “New Age of Opportunity” philosophy as it adds bagel-and-coffee businesses to its chicken-dominated portfolio.
The executives were installed by creditors after the company fell more than $300 million into debt with a highly leveraged buyout of the Churchs chicken chain. It recorded its first profit in 1996, and more than tripled profits to $11 million last year.
Major growth for the company is coming overseas, with some 500 foreign restaurants overall and 125 in Korea alone.
AFC also this year acquired 81 former Hardee's locations in the Carolinas for conversions to Popeyes, and it formed a Bakery Cafe Group to oversee its recently acquired Chesapeake Bagel Bakery and Seattle Coffee Company businesses.
The Bronx-born, 50-year-old Belatti's self- styled “New Age” business philosophy emphasizes racial and cultural diversity, inclusiveness and community involvement.
RTM stands for Results Through Motivation, reflecting the positive, “we- will-do-it” philosophy of founder Russell Umphenor. He uses inspirational anecdotes and an eagle named “Yumi” as a symbol. Yumi means “you and me.”
Beginning in 1967 as a night counter worker at an Arby's restaurant in Michigan, Umphenor rose quickly in the roast-beef sandwich business and by 1973 was able to obtain Arby's franchises in Georgia and Alabama.
By 1984, his company was the largest Arby's franchisee. RTM got into chicken in 1989 by buying Mrs. Winner's, followed by the 1995 acquisition of the Lee's Famous Recipe chain.
Roast beef remains the main business, and RTM last year acquired another 355 restaurants from the Arby's parent company. It has also been growing with “dual concept” restaurants, such as pairing Mrs. Winner's with the Del Taco Mexican food chain.
Perhaps not surprisingly, Arby's last year dramatically expanded its chicken menu with the advertising theme: “OK, We Admit It. We're Chicken!”
Chick-fil-A was born from Cathy's “Dwarf Grill” in south Atlanta, so named because the 10-stool restaurant started in 1946 was so small. In 1964, Cathy began serving deboned, fried chicken on a buttered bun, and thus claims to have “invented” the chicken-breast sandwich. The first Chick-fil-A opened in 1967, its name Cathy's play on “Grade-A filet.”
Cathy used shopping malls as a key venue to grow his company slowly but surely, and today has a goal of $1 billion in sales by 2000. He is focusing on the Sun Belt but is reaching deeper into the Midwest and is targeting some northeastern US markets.
But the Sunday School teacher, now 77 and known locally for his support of foster home and scholarship programs, refuses to bend on one rule - all his restaurants are closed on Sunday.
KFC was spun off from Pepsico last year, together with Pizza Hut and Taco Bell. The three are now owned by Tricon Global Restaurants Inc., a company publicly traded on the New York Stock Exchange.
Tricon lost $85 million last year, in contrast to a 1996 profit of $147 million for the three restaurants under Pepsico ownership. The 1997 figure, however, includes a loss of $362 million in the fourth quarter, partly because of a charge to close more than 700 unprofitable restaurants - mostly Pizza Huts.
But like its competitors, KFC is still growing, now with some 5,200 stores in the United States and 10,000 worldwide - six decades after Harland Sanders introduced his chicken fried with herbs and spices as Kentucky Fried Chicken in Corbin, Ky.
And the “Colonel” still rules the chicken-restaurant roost.
“We like where we're sitting,” said KFC spokesman Mike Tierney.
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Return to Home Page