AKFCF Quarterly - Fall 2017 by Lionheart Publishing Inc.

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WO R K I N G

TO G E T H E R Manager exchange program provides a world of experiences

Also Inside: GAC Report • 2018 Convention Sneak Peek • KFC Foundation

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Manager Exchange Program Benefits Participants

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International teamwork brings new perspectives and ideas to KFC employees from Australia, Canada, and the United States.

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TO G E T H E R Manager exchange program provides a world of experiences

Also Inside: GAC Report • 2018 Convention Sneak Peek • KFC Foundation

features 16

GAC Report Joint Employer: A Leading Labor Issue This Fall on Capitol Hill By Mary Donohue

The AKFCF GAC supports legislation that would create certainty and stability in business relationships plus restore a prior standard of joint employment liability. Find out how you can encourage your representatives to cosponsor the bill.

departments 4 From the Editor By Michelle Hunt

8 President’s Report By Eric Overcash

10 NCAC Report By Tom Slater

20 Manager Exchange from ‘Down Under’ a Great Success By Paul Gereffi

G’day, mates! Discover the adventures taken and lessons learned by Austrailian KFC employees who visited the United States and Canada in an inaugural KFC manager exchange program this year.

In the News

42 CARIBLA By Nathan Contreras and Zaira Guevara

44 KFC NPC Rpeort By David Sparks

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2018 AKFCF Convention Sneak Peek

By Kelly Rodenberg

It’s Prime Time to explore Anaheim. Beautiful California welcomes the AKFCF Convention this February, and you won’t want to miss it. Here’s what you can expect as you plan your visit.

Finance Report By Roger Sparks

47 Upper Midwest Regional Short By Kevin Schlutz

48 Southwest Regional Short

KFC Foundation Programs Impact Futures, Change Lives By Krista Snider

Education and crisis assistance programs from the KFC Foundation make a meaningful impact on hundreds of lives each year. Hear from employees personally touched by programs and find out what’s coming soon from the Foundation.

By Franklyn Nye

50 RSCS Member Programs By Lindsay Krebs

52 Executive Director Update By Kelly Rodenberg

54 Legal Update

By Ron Gardner

56 Looking Back

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Part of the Journey Official Publication of the Association of Kentucky Fried Chicken Franchisees AKFCF QUARTERLY MISSION STATEMENT

6By Michelle Hunt

Many of you know that there have only been three franchise editors of the Quarterly – Darlene Pfeiffer, Jeanine Bagshaw, and me. But did you know we’ve only had two publishers of the Quarterly? Believe it! And since there’s nothing to lose by researching the market and knocking the dust off, so to speak, we decided to request proposals from our current publisher as well as several other custom publishers across the country. We were fortunate to receive several responses and are tediously reviewing those as I write this column. I point this out for a couple reasons: To bring light to print publishing – an industry that is presumably dying at the hands of digital media – and to give some insight into what we do here at the Quarterly while dispelling some myths. Let me just put this out there: Print publishing is not dying. Does mainstream print media have to be more inventive and creative to capture their audience? Yes. But that’s probably more to do with media clutter than with print. Surprise! People younger than me – meaning kids, 20- and 30-somethings – want their print media and their digital media, but – like everything else – they want it custom. They want it speaking to them and their needs, wants, and interests. That means we’re seeing a lot of niche publications for targeted audiences. Guess what fits right into that mold? Association publications! We have a laser-targeted audience for our vendor partners to speak to because this magazine is a benefit of membership in the AKFCF, and all regional members are also members of the AKFCF. Not only is our audience very specific but those who read our magazine are both buyers and influencers. I know what you’re thinking: But, you have a digital edition and a eNewsletter! The digital edition is a necessary component of our overall media strategy – mostly because people “think” they want it but don’t really use it. They are more likely to grab their hard copy any day. 4

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The AKFCF Quarterly is the voice of today’s franchisee family and supports the mission of the Association of Kentucky Fried Chicken Franchisees, Inc.

The eNewsletter is for more timely communications that land in your inbox once a month versus once per quarter. And what do we do in those eNewsletters? We steer you toward the magazine content and upcoming issues, of course. So, while eMagazines and eNewsletters offer searchability and ease of navigation, print magazines allow readers to immerse themselves in the editorial and advertising content. In niche publications like association magazines, you will find readers putting a different kind of significance toward advertising. Remember, this is a highly targeted audience of buyers and influencers who value their association and know that we are stronger because of our relationships with our vendor and corporate partners. Advertising in our magazine and participating in our meetings shows tangible support for what we do, for our franchise family, and for our brand. It’s significant. But how do you break through all the other media clutter? You get more creative and inventive with your advertising as well as how you speak to your audience, just like mainstream media. Whether within your ads or through advertorials, tipons, belly bands, or polybags, there’s still a place for print media, especially in this association. So, as we dive into the future of the AKFCF Quarterly, hard copies will continue to be printed, digital magazines created, eNewsletters blasted – but at the core of everything we do at the Quarterly and in our association are the relationships with our vendor and corporate partners. We use your products and your leadership, but you make us better. I’m looking forward to visiting with you at our family reunion in Anaheim, Calif., this February and partnering to make the next chapter of the AKFCF Quarterly one to remember. Warm Regards,

AKFCF EDITORIAL TEAM AKFCF President Eric Overcash Editor Michelle Hunt Assistant Editor Julie Mantlo Editor Emeritus Jeanine Bagshaw Darlene Pfeiffer AKFCF Administrative Director Debbie Newton Communications Chair Kevin Schlutz Past President Greg Atwell The AKFCF Quarterly (ISSN 1071-9873) is published by the Association of Kentucky Fried Chicken Franchisees for its members and their friends. AKFCF is the independent Association of Kentucky Fried Chicken Franchisees. Franchisee Editors: Michelle Hunt 14812 N Avenue, Columbus Junction, IA 52738 Phone: (319) 728-3282 Fax: (319) 728-2940 michelle@centraliowakfc.com Julie Mantlo 855 Lovers Lane, Suite 111, Bowling Green, KY 42103 Phone: (270) 783-8880 julie@rogmancorp.com Zaira Guevara (International Liaison) Pty # 69328, P.O. Box 25207, Miami, FL 33102 Phone: (305) 384-4242 (U.S.) (011) 506 2208-7828 (Direct) zguevara@caribla.com POSTMASTER: Send address changes to Lionheart Publishing, Inc., 1635 Old41 Hwy, Suite 112-361, Kennesaw, GA 30152. Copyright ©2017 AKFCF, Inc. All rights reserved. Articles may be quoted with credit to the source. Information in the AKFCF Quarterly (ISSN 10719873) represents the views of the authors and unless noted otherwise does not necessarily reflect the policies or position of AKFCF, Inc. Acceptance of paid advertising does not imply endorsement by the Association, or approval of the advertiser or its product or service by KFC Corporation. AKFCF ADVERTISING AND EDITORIAL SUPPORT OFFICE

Send all advertising and editorial submissions for AKFCF Quarterly to:

Lionheart Publishing, Inc. 1635 Old41 Hwy, Suite 112-361, Kennesaw, GA 30152USA Toll Free: (888) 303-5639 Phone: (770) 431-0867 • Fax: (770) 432-6969 E-mail: lpi@lionhrtpub.com Web: www.lionheartpub.com President John Llewellyn, ext. 209 llewellyn@lionhrtpub.com Publishing Editor Brooke Schmidt brooke@lionhrtpub.com Art Director Leslie Proctor leslie@lionhrtpub.com Advertising Sales Aileen Kronke, 678-293-5201 aileen@lionhrtpub.com Sharon Baker, 813-852-9942 sharonb@lionhrtpub.com Reprints Kelly Millwood, ext. 215 kelly@lionhrtpub.com

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Family Reunion: A KFC Tradition 6By Eric Overcash

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see lots of people you know and love, some who you know and don’t love, and many that you perhaps have never met. You learn, you laugh, and – with luck – you walk away knowing more about your family than when you arrived.

“

I am sincerely looking forward to the opportunity to get to know you and your Region more intimately over the next several weeks.

“

As I write this, I am getting prepared to leave for the first of our Regional AKFCF fall meetings this year. One of the greatest strengths of our AKFCF is the true sense of family that exists amongst franchisees. As a long-time member of the Southeast Association, I can attest to the strong friendships that I have with my fellow franchisees and how those friendships are nourished and strengthened at our meetings. As I was thinking about it, it occurred to me that our fall Regional meetings are much like a family reunion. Franchisees who live and work in fairly close proximity to one another get together to swap stories, share best practices, and – perhaps most importantly – get caught up on what is happening in their personal lives and their businesses. This is not dissimilar to what many of us have experienced at family reunions. Sometimes we meet new members of the family and work to get to know them and what their connection is to us. The same is true of new KFC franchisees who enter our system when they attend their first Regional meeting. Our Regional meetings are like small family reunions in other ways, too: We have lots in common; many of us have seen each other regularly for years, and these fellow franchisees feel more akin to cousins than distant relatives. Similarly, our national Convention is more like a family reunion for all the extended relatives, no matter what branch of the family you belong to. Here, you

I am sincerely looking forward to the opportunity to get to know you and your Region more intimately over the next several weeks. Along with Ron Gardner and Kelly Rodenberg, we will be presenting a variety of information to you at your Regional meetings that we hope you will find helpful. We’ll also be updating you on what is going on at KFCC. We hope you will take the time to get to know us better and let us know what your concerns are.

Transition

In September, I attended my first NCAC meeting as your AKFCF president. The open dialogue that took place between the franchisees and the company regarding the strategic direction given the discontinuation of the Zinger Sandwich encouraged me. A lot of opinions were expressed, and the company shared with us some solid plans aimed at maintaining our newfound momentum in the sandwich business. We also learned some exciting information about potential boneless quality and availability enhancement procedures that could be real game changers for our system. As KFC continues to test those processes, I am hopeful to be able to report to you that the tests were successful and real improvements are on the way. Finally, I am happy to report that plans for our Convention are getting set. You can read Kelly Rodenberg’s Convention preview in this Quarterly to find out some of the details, but I am particularly excited about the workshops that really focus on helping you make your business more profitable, as well as our entertainment, including a party featuring The Band Perry. If your Regional meetings are over by the time you read this, thanks for having me – and if your Regional meeting is still coming up, I am looking forward to breaking bread with you, my KFC family. w ww. akf c f . c o m

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Developing Stronger NCAC Regions 6 By Tom Slater

NCAC Vice-Chair

At recent Association meetings, your NCAC representatives have shared important information about a plan to redefine NCAC regions. We will be officially voting on this at our upcoming December meeting, so I wanted to make sure everyone has the opportunity to clearly understand what we are considering and why.

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First, our Bylaws and Certificate of Incorporation state that we are to maintain 12 geographical regions. For the first time since the NCAC regions were established in 1997, we are planning to slightly redefine the regions and expand our opportunities to find the “best of the best” candidates for representatives. When the NCAC regions were first formed, they were determined by the old NFAC regions, with some slight modifications. Our plan is to adjust the lines to follow AKFCF region lines. Three key changes here are: 1. Pennsylvania counties are currently split differently between NCAC Regions 1 and 6, and AKFCF; 2. Franchisees in Northwest Indiana counties (Jasper, La Porte, Lake , Newton, Porter) participate in the Upper Midwest AKFCF region but are assigned to Region 6 (Great Lakes) for NCAC ;

3. In Regions 11 and 12, we see differences in NCAC counties vs. AKFCF counties and will adjust lines there as well. The next concern to address is developing a stronger partnership between the AKFCF regions and the NCAC to ensure we have the best candidates for leadership on the NCAC, regardless of which regional state they reside in. With consolidation of restaurants under fewer and fewer franchisees, the number of options for NCAC representatives in many regions is declining rapidly. Therefore, we will now allow candidates for NCAC regions to come from within any states/counties in the associated AKFCF region. This will not change the number of representatives for any region, and franchisees will still determine who the best candidates are for consideration. Revised regions are on page 10.

And, of course, the president of the AKFCF will continue to serve on the NCAC. Working together, the NCAC and the AKFCF will be able to grow strong leaders who can best represent the franchisees and have influence with KFC, allowing both organizations to maximize their impact on behalf of the system. Pending approval at the December NCAC meeting, this change will go into effect with our new fiscal year starting February 1, 2018, and impact the election process starting in March for Regions 1 (Northeast), 4 (Southeast), 7 (Upper Midwest) and 11 (So Cal). I encourage the Regions to begin consideration now for who their best candidates are for these important roles. Details and timing will be sent out to the regions in mid-March. If you have any questions, please don’t hesitate to reach out to your NCAC representatives or Executive Director Cynthia Koplos.

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KFC creates virtual world to train its real-world cooks “The Hard Way”

Blending virtual reality with real reality, KFC is using VR technology to demonstrate how to make Original Recipe fried chicken in an entirely unique, hands-on and modern way. “The Hard Way – a KFC Virtual Training Escape Room” is designed as an escape room where Colonel Sanders gives his trainees hints and clues along the way to ensure they are making fried chicken The Hard Way – the way that he invented more than 70 years ago. “In 1940, the Colonel was just one man frying chicken by hand. Now we have nearly 19,000 trained cooks across the U.S., but they’re still doing it by hand,” said George Felix, KFC U.S. director of

The Hard Way virtual reality experience takes employee training to a new level to teach KFC cooks how to make fried chicken in a way the Colonel could have never imagined.

advertising. “Our cooking process hasn’t changed much in 70 years, but the way we can train our cooks using modern technology sure has.” After successfully completing the five main steps – inspecting,

rinsing, breading, racking and pressure frying – participants exit the secret training kitchen with a high-level glimpse of what goes into cooking Original Recipe chicken, a process that takes 25

Know Your Acronyms

In our business, there is a great deal of terminology and jargon. As more processes and systems are added, the acronyms continue to pile up. Thus, AKFCF Quarterly decided it is time for us all to brush up on the many acronyms you will hear in your daily lives and read about in this magazine. Be sure to pass this along to your employees, or post a copy in your offices. 76(5P) – 1976(5P) KFC Franchise Agreement AKFCF – Association of Kentucky Fried Chicken Franchisees ABR – Achieving Breakthrough Results ARL – Above Restaurant Leader ASAP – American Showman Asset Program AUM – Assistant Unit Manager BDP – Best Demonstrated Practices BOGO – Buy One Get One BOH – Back-of-house BSC – Balanced Scorecard COB – Chicken on the Bone COGS – Cost of Goods Sold CREST – Consumer Reports on Eating Share Trends CSTM – Customer Service Team Member DMA – Designated Marketing Area FA (Or F/A) – Franchise Agreement FIT – Food Innovation Team FSC – Food Safety Consultation FSTM – Food Service Team Member FTF – Freezer to Fryer GAC – Government Affairs Committee HFFU – Heavy Fast Food Users IAYF – International Association of Yum Franchisees (formerly known as the IAKFCF, International Association of KFC Franchisees) KFCC – Kentucky Fried Chicken Corporation LAC – Local Advertising Council LOR – Loss of Revenue NAC – National Advertising Cooperative (merged with NFAC to become NCAC) NCAC – National Council and Advertising Cooperative

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NFAC NMS NPC NPS OEC PAC POP POS QSR RAF REC RGM RMI ROCC ROI ROMI RRP RSC RSCS SBRA TCB TOL TPWY TRP VOC WAR YUM YRI

– National Franchisee Advisory Council (merged with NAC to become NCAC) – National Marketing Subcommittee – National Purchasing Cooperative (i.e., KFC NPC) – Net Promoter Score – Operations Excellence Committee – Political Action Committee – Point of Purchase – Point of Sale – Quick Serve Restaurant – Refer a Friend – Restaurant Economics Committee – Restaurant General Manager – Restaurant Margin Improvement – Restaurant Operations Compliance Check – Return on Investment – Return on Marketing Investment – Restaurant Ready Process (aka The Model) – Restaurant Support Center – Restaurant Supply Chain Solutions (formerly UFPC) – Supplier Business Relationship Agreement – Technology Capability Builder (the KFCC support team for Merit installations) – Territory Operations Leader – Taking People With You – Targeted Rating Point – Voice of the Customer (formerly CBCC) – Weekly Activities Report – Yum! Brands – Yum! Restaurants International

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minutes from start to service in its real-world KFC kitchens across the United States. In the virtual world, the game is able to utilize the magic of modern technology, such as time lapse, to provide participants with a 10-minute demonstration of KFC’s cooking process. KFC will use the VR simulation to supplement its robust, multi-step employee training program, called Chicken Mastery Certification, which provides detailed eLearning and hands-on training for cooks in each of KFC’s kitchens. KFC will provide yet another platform by bringing the VR simulation technology to its regional general manager training classes, quarterly franchise meetings, and employee onboarding at its headquarters. Incorporating playful design and game mechanics that make virtual reality so popular, such as the escape room concept, mini games, surprises and a meticulous Colonel who controls the entire experience, KFC’s VR tool is a fun and interactive add-on to the brand’s training program. Instead of using virtual reality to teach team members how to do their job faster, KFC is using the technology to teach its cooks how to make its world-famous chicken better. It’s a gamified take on the Colonel’s proprietary, once-patented process for pressure-frying chicken, using his still-secret Original Recipe blend of 11 herbs and spices. “The Hard Way – a KFC Virtual Training Escape Room” was developed in partnership with Wieden+Kennedy’s creative technology group, W+K Lodge, and designed for the Oculus platform utilizing the Rift headset and Touch controllers. Source: PRNewswire

KFC disrupts GPS technology market by creating firstever, technologically superior GPS cassette tape

to the classic American road trip, Kentucky Fried Chicken announced its latest breakthrough – the world’s first-ever GPS cassette tape. Quite literally, the technologically superior cassette tape provides GPS directions on a cassette tape, with the voice of Colonel Harland Sanders giving overly-detailed directions, rambling down hilarious tangents and singing his favorite road trip sing-along songs.

Although nearly all modern-day GPS systems are significantly easier to use (and aren’t based on 30-yearold cassette tape technology), KFC does things The Hard Way, which is how this charming, reverse technological breakthrough came to be. “The digital audio formats we have today pale in comparison to the mahogany-rich sound of a classic vinyl record,” said Steve Kelly,

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Kentucky Fried Chicken announced its latest breakthrough – the world’s first-ever GPS cassette tape.

director of media and digital, KFC U.S. “Unfortunately, no one ever figured out an easy way to put record players in cars, so we went with the next best audio format: a cassette tape.”

Beginning in KFC’s hometown, Louisville, Ky., and ending at KFC’s iconic Big Chicken restaurant in Marietta, Ga., KFC’s GPS cassette tape narrates a picturesque drive through the part of the country

Perfect Finish!

responsible for Georgia Gold Honey Mustard BBQ and Nashville Hot – two popular regional flavors that can currently be found on KFC menus nationwide as Extra Crispy Tenders, Chicken Littles, and Extra Crispy Chicken. The meandering drive makes pit stops at unique cultural experiences in Kentucky, Tennessee and Georgia, including a stop in Corbin, Ky., where Col. Sanders invented his Original Recipe. By simply pressing pause on the cassette at any time, road trippers can take in the Americana nostalgia found throughout the Appalachian region, without the distractions of on-screen directions or unrelenting interruptions by artificially intelligent direction apps. “Through the GPS cassette tape’s off-the-beaten-path prompts, KFC fans are directed to take unexpected turns and try our Georgia Gold Honey Mustard BBQ and Nashville Hot regional flavors along the way – creating a journey full of experiences that recalls the trip Colonel Sanders took selling his famous fried chicken recipe door to door in the 1950s,” Kelly said. Source: PRNewswire

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CONDOLENCES Norma Margarita Villamizar Oberst passed away on July 16, 2017. Norma graduated from Northwestern State University with a bachelor’s of science in nursing and, in 1982, she became the co-owner of a KFC franchise with stores in three states. Norma was also a nursing instructor and incredibly active in her Kentucky community. When back in Louisiana, she enjoyed horseback riding on the family farm. She is survived by her children Michele Oberst, Charlie Oberst Jr., Alicia Oberst Walters (Dan), Paul Oberst (Jenny) and Amy Oberst Darnieder (Casey); grandchildren Daniel and Alex Walters, Cole Oberst, Paul Jr., William and Tucker Oberst, James and Gretchen Darnieder and other family member Andre Cantareira. William “Bill” F. Alford, Jr. passed away on Sept. 14, 2017. Bill had three major passions in life: family, horses, and Kentucky Fried Chicken. He was a KFC franchisee for more than 50 years. Together with his dad, Bill built the KFC business in southwest Michigan to include 19 restaurants and a KFC distribution operation. He served as president of the Great Lakes association and as first vice president of the AKFCF. He was a constant advocate for Original Recipe and the flavor and taste of KFC products. His strong voice for the rights of his fellow franchisees helped preserve the 1976 (5P) contract still in place today. He loved his KFC family. Bill is survived by his wife Nancy; children William III, Richard, Ashley, Allison, and Wyatt; stepdaughters Jacklyn, Jerika, and Katie; and 10 grandchildren.

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Joint Employer: A Leading Labor Issue This Fall on Capitol Hill By Mary Donohue

The AKFCF Government Affairs Committee (GAC) has taken on the issue of joint employer since the

National Labor Relations Board’s (NLRB) 2015 Browning-Ferris Industries (BFI) decision , which saw the creation of a new “ joint employer ” liability standard . T he updated standard of aftermath of the

joint employment is now any business that exercises indirect , potential , or even reserved control over the practices of another business and its employees .

This is a concern to KFC franchisees because if the new standard is taken to its logical conclusion, franchisors such as KFC might determine that they will be liable for administrative directives and mishaps usually handled by the independent owner and, as a result, decide to exercise even more control over the day-to-day operations of your independently owned and operated business. It also would have the likely effect of making disgruntled employees more likely to sue, as they may now believe they would have the deep pocket of the franchisor to chase, and not just the small business owner that employs them. The AKFCF GAC, in conjunction with the Coalition to Save Local Business and many other organizations, has pushed Congress for a legislative solution to the new joint employer standard over the past few years through countless Hill meetings, letters, briefings, and hearings. After a failed attempt to pass legislation in the last Congress, Rep. Bradley Byrne (R-AL), Rep. 2 017 gg A KFCF A KFCFQuar Q uar FaFa ll ll2 017 tete rl yrl y

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GAC REP O RT Virginia Foxx (R-NC), Rep. Henry Cuellar (D-TX), Rep. Lou Correa (D-CA), Rep. Tim Walberg (R-MI), and other cosponsors met on Capitol Hill before the 2017 August recess to announce the introduction of the “Save Local Business Act” (H.R. 3441). The legislation will restore the NLRB’s joint employer standard as it existed prior to the 2015 Browning-Ferris case – creating certainty and stability in business relationships and restoring the prior standard of joint employment liability. We expect the legislation to be voted out of committee and eventually pass the House later this fall with the hopes of sending it to the Senate for further discussion and deliberation. The sooner our combined efforts help get the legislation through the House, the better our chances are of signing the bill into law and restoring the standard. Chairwoman of the House Education and Workforce Committee, Virginia Foxx (R-NC) said in a statement that, “This is a very real problem in need

of a solution. Earlier this year, 13 of my Democratic colleagues sent a letter to the NLRB asking for clarification on basic elements of the joint employer issue. We agree workers and job creators need clarity and certainty.” Congressional action is the best path forward to delivering the relief American business owners are looking for. The Save Local Business Act is the most logical and straightforward way to undo the damage that might be done and protects local employers and their employees from future harm. The AKFCF GAC is urging members of the AKFCF to reach out to their Members of Congress in the House of Representatives and encourage them to cosponsor the bill (H.R. 3441). If you need help identifying your Member of Congress, constructing a letter, or need assistance getting in touch with their office, please contact Mary Donohue at Polaris Consulting, LLC (mdonohue@polariswdc.com) for more information.

AKFCF – P o l i t i ca l A c t i o n C o m m i t t e e (PAC) The AKFCF created a Political Action Committee (PAC) to make sure our voices are heard in Washington, D.C. The AKFCF Government Affairs Committee and the AKFCF PAC Board of Directors would like to thank the franchisees listed below for their contributions to the AKFCF PAC. Each quarter, we list the names of the franchisees who have supported the PAC at time of print as a token of our appreciation. This list is all the contributions, broken down by region. We encourage you to please join your fellow franchisees and support your AKFCF PAC. For information on how you can become involved, or if you don’t see your name and should, please contact Ray Aley, treasurer of AKFCF GAC/PAC at (802) 318-4705, or via e-mail at KFCRay@aol.com. Great Lakes William Alford Jr. Bruce Bagshaw Blake Bagshaw Jeanine Bagshaw David Bell Kathy Bouwman Joan Bowling Keith Chambers John Coldwell Brian Denman Alessio DiFranco Anne Goodnight Kirk Gurney Mary Beth Hamilton Robert Holt Lesley Hottinger Theresa Kelly John Kovach George Lambos Craig Lee John Masters Lynn Mayer James McKenzie Diana Myers

A K F C F Quar te rl y

Marvin Payne Jordan Anne Phillips Dana Rudoni Shirley Vangeloff Scott Vorrath Brian Wheeler Chad Wheeler Larry Wheeler Robert Widder Northeast Ray Aley III Diane Burns Tony Cameron Robert Carlucci Tom Cecconi Gary Cocolin Keith Cole David Evans Joe Farley Frederick Gallant Michael Houston Donald Lopes Dale Moulton Robert Rianna

Fall 2017

Alex Rosenblum David Rudnick Theodore Silver Eugene Skowronski Larry Starkey Matthew Thurston James Waters Northwest Frederick Baker Robert Carle Manuel Galhandro Ralph Harman Brett Harris James Jackson Lisa Kern Joe & Charlene Oleinik Sam Sibert Donald Steinke Todd Stewart Ken & Jane Wall Southeast Marcus Brigance Eric Felker

Austin Felker Sims Johnson Larue Kohl Lynn McSwain Eric Overcash James Ogle Vic Peeples Nicholas Potter Terry Rogers Linda Rosenbalm Fred Ruth Sr. Leslie Sharp Bill & Bonny Shelton Marcus Shelton Jay & Kelly Shoffner Richard West Bill West Steve West Charles “Tim” West Daniel Yagoda Southern California Charles Buckner Shahid Chaudhry Israel Diaz

Piyarali Hashim Russell May Patricia McBrayer Robert Prendiville Southwest Debra Ashmore Richard Cahill Rudy Garcia Rajeev Jain Franklyn Nye Peggy Rasmussen Doyle Sanders Upper Midwest Margaret Duenow Julie Harrigan Holly Helf Michael Kulp Kevin Schlutz Susan Schmidt Doug Smith Gary Tiedeken Pete & Mary Wasilevich

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AKFCF Political Action Committee (PAC) The AKFCF Political Action Committee (PAC) is carefully regulated by the Federal Elections Committee (FEC), and its only purpose is to contribute funds to Congressional Members of Congress and candidates. We need our PAC funds to ensure pro-business candidates are elected each Congress. As of Jan. 1, the AKFCF PAC has been accepting donations for the 2017 cycle. In the past, we have suggested franchisees donate $100/store, per year. However, we cannot stress enough that this amount should be the minimum donation for each franchisee instead of the maximum. The AKFCF GAC is struggling to support Members of Congress who will continue to perpetuate business-friendly legislation. Without your support, the AKFCF’s interests will not accurately be portrayed, and our presence on Capitol Hill will dwindle. As franchisees well know, in 2016 the AKFCF was faced with a serious overtime issue that was set to go into effect the week of Dec. 1, 2016. The new rule would have doubled the salary threshold for employees to qualify as exempt from overtime pay requirements from $23,660 per year to $47,476 per year. The delay and later halt of the rule came as a great relief to franchisees, but the fix is far from over. A version of the rule will be implemented once the Trump administration reviews additional comments from businesses and individuals. This issue, along with myriad others facing franchisees – such as the renewable fuel standard (RFS), joint employer, minimum wage, etc. – are still up for debate in Congress. Several pieces of high-profile legislation that could drastically impact your business will be reintroduced in Congress and beyond. Without a healthy, robust PAC, the AKFCF GAC will not be able to effectively represent KFC franchisee interests on Capitol Hill. To past donors, the AKFCF GAC would like to extend a sincere thank you for your support. Thank you again for recognizing the importance and necessity of the PAC in today’s political and business-centric world. You may make your 2017 AKFCF PAC donation online by visiting our Government Affairs portal on the AKFCF website: www.akfcf.com. For more information, please contact your regional GAC representative or Mary Donohue at Polaris Consulting, LLC (mdonohue@polariswdc.com).

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F I N A N C I A L A D V I S O RY

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INVESTMENT BANKING

A KFCF Q uar te rl y

M ANAG ER E X C H A N G E P ROG R AM

Manager Exchange from

‘DOWN UNDER’

a Great

Success

A program between Australian and North American KFC operators benefits visitors and hosts alike

By Paul Gereffi

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A KFCF Q uar te rl y

M ANAG ER E X C H A N G E P ROG R AM

ravel can be the best education. Observing the differences in people, places, and cultures, while at the same time realizing how alike everyone is, is all part of a unique learning experience. This is especially true when visiting those who are working in the same industry; observing how others operate can be an eye-opening experience. For some KFC managers from Australia, a trip to North America offered them the chance to do just that. For visitors and hosts, the experience proved worthwhile and valuable – and became one that might continue. Australian franchisee Greg Fisher hatched the idea at an AKFCF Convention in Las Vegas. Fisher, who has more than 30 years experience in the restaurant business and is operator of KFC Northern Suburb Restaurants in New South Wales, was having a discussion with other franchisees about their careers and the KFC business over the years. The company has provided a comfortable living for many in the system, they realized, and spreading that concept was part of Fisher’s goal. However, for all-too-many team members and managers, working in a restaurant is simply a job until they find something else. Fisher thought that there should be a way to get more people to think of working at KFC as the potential beginning of a longer career. “I thought about what makes people feel they have a good career,” Fisher says. “Building a culture and making them feel they are part of a larger system is an important part of that.”

So, Fisher came up with the idea of building a sense of community and comradery by sending some managers to another country to share their experiences with their foreign colleagues and to learn how the business operates elsewhere. It was well received. “When I first made the offer, I got a dozen responses in an hour,” Fisher says. The idea soon became a reality. In June 2017, a total of 13 managers from Australia were sent to Atlanta; San Diego; Hialeah, Fla.; and Edmonton, Canada for a week. Eleven of the mangers were from franchised restaurants and two were from corporate stores. In addition to meeting fellow KFC franchisees, managers, and team members, the Aussies worked full shifts in some of the restaurants alongside their American and Canadian counterparts. This offered them an up close and personal look at how things are done in the United States and Canada. The team focused on operations, human resources, equipment, and other intricacies of the restaurant as well as sharing best practice lessons. It was an educational experience for both sides. Every manager was moved by the gracious reception they received during the trip, according to Fisher. “The hosts really went above and beyond,” he says. “[Participants] were blown away by how hospitable they were. Just fantastic!”

Greg Fisher, who began the Manager Exchange Program, hopes those who take part come away with a broader understanding of the KFC culture and its career potential.

A K F C F Quar te rl y

Fall 2017

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The Australians took away several key learning points. For example, one difference between those in the United States and their Aussie counterparts is customer service. The managers noticed immediately that in American restaurants the employees are anxious to welcome their customers inside the restaurant and value them as guests. In Australia, the focus is slightly more on speed of service and food preparation, and customers may sometimes be taken for granted. â&#x20AC;&#x153;Better customer service is something our managers took back with them,â&#x20AC;? Fisher says. There were many other differences in the U.S. and Canadian restaurants. A happy staff seemed a hallmark of the restaurants they visited on the trip. In addition, the complexity of co-branded operations was new, especially the amount of preparation necessary for completely different menu items. Co-branded units are not currently part of the Australian system. Perceptual differences exist as well. Working in a restaurant is held in higher esteem in Australia than is often the case in the United States. In Australia, according to Fisher, there are about 800 units for a population of 24 million, and KFC is a big employer. The average unit volume in Australia is $2.8 million. Managers can average about $38,000 per year in U.S. dollars, and employees at the store level make the equivalent of $13 per hour. The result, says Fisher, is the ability to get high quality employees.

AKFCF Fall17 Ad.indd 1

Australians visiting American KFC restaurants saw an emphasis on customer service.

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M ANAG ER E X C H A N G E P ROG R AM Overland Park, Kansas. KPB Foods owns the renowned and recently renovated Big Chicken KFC restaurant in Marietta, Ga., in addition to many other KFC and KFC co-branded units. Kulp and his team offered the Australian managers a chance to experience a multi- For Australian managers Ashley Davis (left) and brand restaurant for Natalie Chiera (right), shown here with KBP manthe first time. In ad- aging partner Natasha Moore, working at the “Big dition, they visited Chicken” — an especially high volume restaurant — was quite an experience! the “Big Chicken,” an especially high-volume restaurant. Working in those busy restaurants offered the visitors a chance to see how to blend speed of service with customer appreciation. In addition to experiencing another country, getting the franchisees to focus on KFC through a career lens instead of just a job was an important part of the program, Kulp says. “The greater experience wasn’t just about restaurants but also the birth of the brand and its potential reach, breadth, and growth potential,” Kulp says. “The experience was very special, and I think it helped broaden their perspective.” It wasn’t all work, as the Aussies went to a barbecue at one of the local franchisees’ home, visited local business establishments, and even attended an Atlanta Braves baseball game. “Our team enjoyed it as well and that made the whole experience very special,” Kulp says. Discovering Cuban coffee in South Florida was part of the experience of the Australian team that visited franchisee Dan Yagoda in Hialeah, Fla., near Miami. Yagoda has been in the KFC system for more than 40 years. Yagoda is also past president of the AKFCF and was present at the convention when Fisher first came up with the manager exchange concept. He was one of the principals involved in the inception of the program. “This was a great opportunity for my team, and they embraced it,” Yagoda says. “We’re a small franchisee with three restaurants, but we were proud to be chosen.” Yagoda says that partnering with the Australian visitors helped instill the idea of elevating management positions as a viable career choice instead of a temporary job. As in the other cities, the team had a chance to work in the restaurants. They also found time for sightseeing and fun as the team visited Walt DisAustralian managers and KBP employees in Marietta, Ga., had fun meeting and ney World and the Kennedy Space Center at Cape learning from one another. Australia hopes to be the next host nation in the successCanaveral. ful exchange program. Operationally, speed of service is of paramount performance due to the high volume of customers, which can sometimes cause a loss of focus on the guest. Further, the menu is a bit different, with an increased emphasis on chicken sandwiches, which they call burgers, and french fries. They also serve flatbread sliders with grilled or crispy chicken as a snack item. Finally, a limited number of restaurants serve breakfast items such as bacon and egg rolls and chicken, bacon, and egg twisters. Measuring performance is more than just a numbers game, the Australian team learned. Intangibles such as customer satisfaction and a positive workplace atmosphere are more common in the United States and Canada than back home. “Every way of measuring our performance in the system is based on numbers, and nothing represents the culture and other aspects of our restaurants,” Fisher says. “We seek people who make the workplace a happy one. It’s not about a number; it’s about a culture.” The experience was also a learning opportunity for the managers and employees who hosted the visitors. Many of the U.S. and Canadian KFC team members had never met someone from Australia. There were a lot of firsts on both sides. Helping to pilot the program in the Atlanta area was Michael Kulp, president and CEO of KBP Foods, based in

A K F C F Quar te rl y

Fall 2017

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A KFCF Q uar te rl y

M ANAG ER E X C H A N G E P ROG R AM

Top: Australian managers and KBP area coaches mix and mingle at the home of Matt Hansen, chief operating officer of KBP Foods. Center: Participants in the exchange program visit recreational hot spot Top Golf for some play time. Right: KBP Foods Regional Vice President Larry Rooney and Greg Fisher of Sydney Australia’s Fishfood Group enjoy getting to know each other through the exchange program.

A K F C F Quar te rl y

Fall 2017

“The experience was fun for us as hosts and a real treat for our Australian managers,” Yagoda says. In California, franchisee Shamez Jivraj, who operates 27 KFC units in the San Diego area in addition to Pizza Hut stores in Canada, hosted a team of managers. “When Greg approached us to participate in the exchange program, we jumped on it,” Jivraj says. “It’s a fantastic opportunity.” The chance to build camaraderie and share best practices was the driver that convinced Jivraj that the manager exchange would bear fruit. In addition, says Jivraj, other types of businesses have similar programs, and this puts KFC in the game with them. “This was a big morale boost for our employees and managers,” says Mike Matthiesen, director of operations. “The visitors were anxious to learn from us, and it’s an experience we will both remember forever. I also saw an improvement from our side. It was a big win for everyone.” The experience changed the mindset of the Australians for the customer service aspect of the business, according to Jivraj. Delivering better service for their customers was something that could change when the visitors return to Australia. Further, the w ww. akf c f . c o m

employees in California learned that the KFC brand is revered in many other places. “It instilled pride in our employees that we have a global brand and opened our eyes to how it is perceived elsewhere,” Jivraj says. Edmonton, Canada franchisee Rachel Lloyd also hosted a group of Australian visitors. Lloyd has KFC restaurants throughout the province of Alberta, including Banff, Calgary, and Edmonton. The trip culminated with a recognition banquet for participants hosted by Yum CEO Greg Creed in Plano, Texas. The dinner was well received by all involved and offered the opportunity for all the participants to meet each other. In addition, gifts were exchanged by both sides. Looking forward, this could be just the beginning for the Manager Exchange Program. It can’t be called “exchange” until it goes both ways. Fisher hopes to reciprocate and host managers from the United States and Canada early in 2018. “We have the obligation to give back, and the onus is on us to do it,” he says. “This could be the beginning of a cultural shift.”

Participants in the Manager Exchange Program saw first hand that KFC is a global brand.

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A KFCF Q uar te rl y

2018 CONV E N T I O N PR E V I E W

The

2018

AKFCF Annual Convention

It’s “Prime Time,” AKFCF!

…PRIME TIME to get together in Anaheim… …PRIME TIME to be #1 in taste…

…PRIME TIME to take sales to the next level…

…PRIME TIME to continue to be stronger than ever…

…PRIME TIME to continue to serve the World’s Best Chicken… …PRIME TIME to be more successful in your business…

…PRIME TIME to make the most out of tools and resources… …PRIME TIME to enjoy something new…

…PRIME TIME to improve operations and be more profitable… …PRIME TIME to have some serious FUN! 28

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Itâ&#x20AC;&#x2122;s Prime Time to Get Together in Anaheim By Kelly Rodenberg Fa ll 2 017

A KFCF Q uar te rl y

2018 CONV E N T I O N PR E V I E W

ou’ll experience the magic of Anaheim at our 2018 Annual Convention, but it won’t be the magic of Disney that captures you. It will be the magic of TV. The Greater Los Angeles area – including Anaheim, Burbank, and Hollywood – is the TV capital of the world. It’s the perfect location to leverage our “Prime Time” theme for this year’s Convention. AKFCF’s “Prime Time” will offer a wide-ranging mix of panel discussions offering real-world advice, Family Feud game show-style fun; and several interactive workshops providing tips from leading experts from the Disney Institute, BridgeWorks, KFC Corporate and leading franchisees. While off-air, we invite you to spend quality networking time with friends and colleagues on the golf course, packing and sorting food at the Orange County Food Bank, mingling over drinks at the receptions, and dancing to some of today’s top artists.

Preparing for Prime Time

The Convention will be built around TV talk and game shows and will debut the season premiere of our very own “AKFCF Prime Time.” It will happen before a live audience this February from the magnificent Marquis Ballroom of the Anaheim Marriott in sunny California. This newly created, award-winning talk show will feature one-on-one interviews with well-known AKFCF and KFCC personalities discussing current events, brand culture, keys to profitability, steps to success, and the trending topics of the day. We understand the importance of educating the franchisees during the week, but we also wanted a new format that would be engaging, entertaining, memorable, and that would allow for the most effective approach for communicating important newsworthy messages. Veteran comedian and television personality Scott Bloom will bring his sharp sense of humor and hightempo energy to the AKFCF talk show with his welcoming interview style, love of audience participation, and innovative sketches. In our season premiere, we will swap stories, challenge each other on issues and engage the studio audience about events in the headlines and in our own restaurants. Show segments will include guest interviews with AKFCF President Eric Overcash and KFC President Kevin Hochman. Special guest appearances will be made by newsmakers from KFC Corporate, NCAC, and RSCS.

It’s Prime Time to Discover Anaheim

For most people, Anaheim is synonymous with Disneyland. And while it’s true that the amusement park is one of the city’s biggest draws, if you dig a little deeper, you’ll find there’s a lot more to this city than the Mouse House. Anaheim is constantly growing, transforming, and evolving. It is right in the heart of sunny Southern California – the perfect base for any Southern California vacation. 30

A K F C F Quar te rl y

Fall 2017

Many of Anaheim’s historic districts have seen a huge revitalization in recent years. One the most popular developments is the Packing District in Downtown Anaheim. It includes hip restaurants, a park, and is anchored by the Packing House – a giant “food hall” filled with small eateries, vendors, kiosks, and acts as a community gathering space. The Packing House was originally the Sunkist Orange Packing House built in 1919. Located right along the railroad tracks, the building served as the hub where fresh citrus would arrive from local farms and be packed and shipped. Now fully restored and renovated, it has two levels and more than 25 vendors selling fish and chips, soul food, and a number of fresh fruits, veggies, and meats. In addition to the Packing District, the Downtown Center Street Promenade has also been revitalized. This little strip has more than a dozen boutiques and cafes including a fancy cheese shop, “BarBeer” (a hybrid barber shop-beer bar), a haberdashery, and a vegan raw-food kitchen. The Anaheim GardenWalk is an outdoor dining, entertainment, and shopping destination situated in the heart of the Anaheim Resort District just steps from the Marriott and Anaheim Convention Center. GardenWalk offers guests a collection of popular restaurants and nightlife.

In addition to Disneyland, other affordable theme parks such as Knott’s Berry Farm and Adventure City, the picturesque 140-acre Yorba Regional Park, call Anaheim home. And don’t forget the “angelic” baseball stadium. When you need a break from the crowds, simply hop in your car and drive west to the coast: the shorelines of Long Beach, Laguna Beach, and Huntington Beach are all within about 25 miles of Anaheim.

So Stay Tuned

We promise an engaging, upbeat, and comedic energy to this multi-layered program. It will be filled with fun, education, networking, music, and laughter. For complete details on the 2018 Convention and how to register, please visit www.akfcf.com. w ww. akf c f . c o m

HERE’S A SNEAK PREVIEW OF WHAT’S COMING TO PRIME TIME THIS SEASON!

WEDNESDAY, FEBRUARY 21 6:30 A.M. – 3:00 P.M.

Ray Zimmerer Memorial Golf Tournament

12:00 P.M. – 7:00 P.M.

Attendee Registration

1:00 P.M. – 4:00 P.M.

Community Service Event

3:00 P.M. – 5:15 P.M.

Workshops

Special Guests Include:

THURSDAY, FEBRUARY 22 7:15 A.M. – 8:30 A.M.

Breakfast Buffet

8:30 A.M. - 9:30 A.M.

AKFCF Opening Session - Episode 1

9:30 A.M. - 9:45 A.M.

Beverage Break

9:45 A.M. - 12:20 P.M.

KFCC Presentations - Episode 2

12:30 P.M. – 1:30 P.M.

Lunch Break

2:00 P.M. – 5:30 P.M.

Workshops

5:30 P.M. – 8:30 P.M.

Welcome Reception - Exhibitor Showcase

| Jabez Lebret

FRIDAY, FEBRUARY 23 8:00 A.M. – 10:00 A.M. Regional Breakfast Meetings 10:15 A.M. – 11:30 A.M.

AKFCF Board Meeting

11:30 A.M. – 1:30 P.M.

Lunch – Exhibitor Showcase

1:45 P.M. – 5:00 P.M.

AKFCF Closing Session – Episode 3

6:30 P.M. – 10:00 P.M.

California Dreamin’ Celebration

SATURDAY, FEBRUARY 24 7:00 A.M. – 8:00 A.M.

Breakfast Buffet

8:00 A.M. – 9:45 A.M.

AKFCF Legal Update (Franchisees Only)

10:00 A.M. – 11:30 A.M. AKFCF Town Hall (Franchisees Only) 11:30 A.M. – 1:30 P.M.

Lunch – Exhibitor Showcase

1:30 P.M. – 3:15 P.M.

Bridging the Generational Gaps - Workshop

3:30 P.M. – 4:30 P.M.

Listen and Learn from Our Best - Workshop

4:30 P.M. – 6:00 P.M.

NCAC Annual Meeting

6:30 P.M. – 9:30 P.M.

Picnic Party in the Plaza

PGP_FA22802_AKFCFQuarterly_Fall_PrintAd_hi.pdf

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Jabez is a business owner of a marketing and technology company in the legal profession. Why is this important? Because he doesn’t just talk about managing millennials, he lives it. Current Forbes contributor and previous NBC Chicago business columnist, author and co-founder of a digital marketing agency, Jabez shows you how to leverage the different generations and use contribution leadership to dramatically improve your business. “From building better teams to boosting your sales, when you learn the differences between the generations, and how to effectively manage today’s dynamic workforce, your production will increase significantly and your organization will 2:06 PM become more efficient,” Jabez explains. His keynote addresses

*Schedule Subject to Change – Visit www.akfcf.com for updates and to register online.

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Fa ll 2 017

A KFCF Q uar te rl y

2018 CONV E N T I O N PR E V I E W have been heard around the world, and he has impacted hundreds of companies, including four of the top 10 largest companies in the United States. He is described as entertaining, engaging, educational, and will bring high energy and actionable tools to this presentation. Don’t miss this keynote segment on Friday, Feb. 23.

| Doug Lipp

Doug will share the secrets behind the extraordinary success of one of the world’s most beloved brands: Disney. How does Disney continually top the charts as one of the world’s most embraced companies? How does it keep its employees and customers so fiercely devoted to the brand? Most importantly, how can our organization tap into the The Marriott at the Anaheim Convention Center Grand Plaza. attitudes, behaviors, and business practices that have made Disney so successful? Our guest speaker, It was during his tenure at Disney that Doug developed a deep Doug Lipp, is uniquely qualified to answer those questions and and fierce passion for service excellence and its connection to more! At the age of 29, Doug was catapulted to the helm of the a culture of significance. Doug is also an eight-time business employee training and development team at Disney University. author including his most recent and best-selling book, Disney U: How Disney University Develops the World’s Most Engaged, Loyal, and Customer-Centric Employees.

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A K F C F Quar te rl y

Fall 2017

| Scott Zimmer

As a proud Xer and one of BridgeWorks’ speakers and generational experts, Scott’s pres entation will clearly illustrate the stress points between generations and provide clear solutions to help relieve tension and encourage better understanding and collaboration across generational divides. A child of the ‘80s and ‘90s, Scott has insider knowledge into what makes his generation tick. With 15 years of public speaking experience, Scott has developed a uniquely personable style and uses insight, humor, and data to foster an environment where every generation feels valued and understood.

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MAK ING M U S I C I N AN AH E I M

Friday, Feb. 23

Grammy® Award-winning superstar sibling trio The Band Perry are an unstoppable presence on the modern music scene. Since the release of their 2010 platinum-selling self-titled debut album, The Band Perry have vaulted 10 hit singles into the Top 10 of Billboard’s Country and Hot AC charts. Among them are the sextuple-platinum chart-topper “If I Die Young” (whose video is now Vevocertified for reaching 100 million plays) and the platinumselling hits “You Lie” and “All Your Life”. Upon the release of their second album, Pioneer, the band saw the smash singles “Better Dig Two” and “DONE” ascend to the chart summit as well. In total, the band have sold nearly 13 million singles and 2.5 million albums to date. In February 2015, The Band Perry won their first Grammy® Award for Best Country Duo/Group Performance and have earned numerous awards from all corners of the music industry. They were named ambassadors for Teen Cancer America (a

charity founded by The Who’s Roger Daltrey), and their single “Live Forever” was the official song of Team USA at the 2016 Summer Olympics in Rio. After a hugely successful spring / summer 2017 concert tour, The Band Perry have returned to the recording studio to create the music for their next album, due in early 2018. Consistently praised for their ability to reinvent themselves musically and visually, current anticipation for the band’s new music is high from fans and industry alike. The AKFCF is thrilled to host a performance by The Band Perry before they release their next album and embark on a new tour.

ALLSTARS

Saturday, Feb. 24

We invite you to sing and dance under the stars on Saturday night with The LA ALLSTARS BAND! They have performed for major corporations such as IBM, Google, Bank of America, Sundance Film Festival, American Airlines, Toyota, Warner Bros. Studios, and McDonald’s. They cover many styles, ranging from today’s current hits to classic rock, R&B and Motown to disco, standard jazz and swing. Their vast song list will have you on your feet, singing along to your favorite tunes no matter the genre. Their fresh, hip-edgy vibe paired with a contemporary approach will provide a unique and memorable experience on our final night in Anaheim.

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A KFCF Q uar te rl y

K F C FOUN DAT I O N

KFC Foundation Programs Impact Futures, Change Lives

A K F C F Quar te rl y

Fall 2017

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$17 Million Makes a Difference

he Kentucky Fried Chicken Foundation, an independent nonprofit organization, is passionate about providing charitable support to KFC U.S. restaurant teams through education and crisis assistance programs. Since 2006, the KFC Foundation has awarded $17 million to more than 4,500 students and KFC Restaurant employees, assisting them in going to college, earning their GED and in hardship/crisis situations. Together, with franchisee support, we are changing lives for the better. For the 2017-18 academic year, the Foundation will help more than 500 employees go to college by awarding them $1.2 million in grants. In the first round, 95% of winners were at franchise-owned restaurants; 22% were previous winners. First round recipients can be found in 39 states and all seven AKFCF regions. • KFC restaurant employees have two opportunities each year to apply for college tuition funds: February/March and August/September. • If an employee wasn’t selected for a first round award, they may apply again in the second round. First round recipients are ineligible.

By Krista Snider, Foundation Managing Director

We’ve changed the name, but it’s the same amazing program that helps KFC restaurant employees who didn’t graduate from high school achieve their dreams! Through early September 2017, we’ve assisted 90 KFC restaurant employees through the challenging process of earning their GED. Over 250 others are currently studying. • More restaurant employees are now eligible to get their GED for free and with the help of a personal coach! The 6 months minimum employment requirement has been eliminated, meaning all employees in good standing at participating restaurants are admitted. • Rise with GEDWorks is available in all 50 states and is offered in both English and Spanish. The KFC Family Fund helps restaurant employees directly impacted by a severe hardship, crisis or catastrophic incident that was beyond their control. Program resources are designated for crisis situations, including fire, natural disasters, funeral costs, serious illness, personal injury (away from work), loss of essential personal property, military deployment and other financial hardships. Through early September 2017, 131 KFC restaurant employees and their families have received assistance totaling $126,000… and counting! Applications for Hurricanes Harvey and Irma continue to come in! • If you have an employee who needs assistance, visit TeamKFC and search “Family Fund” or contact the Foundation at 800-248-5092 or Foundation@kfc.com. Fa ll 2 017

A KFCF Q uar te rl y

K F C FOUN DAT I O N Coming in 2018: Financial Literacy for Restaurant Employees

Spotlight on KFC Foundation Program Participants Mila Broche Spring 2017 REACH Educational Grant winner & team member

“Growing up in a small country like Cuba with terrible conditions made me realize how important education is. KFC has been my home since I came to the United States two years ago. They’re like a family to me. As my first job, it’s granted me so many opportunities… most importantly, it’s given me the chance to achieve my dream to become a nurse and give back to my community… I’m honored to receive a scholarship.”

Kyle Wetzel Rise with GEDWorks™ graduate & shift supervisor

Kyle successfully completed the GEDWorks program in just two months. He is motivated by his drive to better himself and to enter a career in public service. “Thank you so much for the support and for helping me further my education and being able to reach higher! KFC is such a wonderful company to work for.”

Andrea Jackson-Lewis KFC Family Fund recipient & restaurant general manager

As a single parent with a very busy job, Andrea needs all the help she can get. When life gave her some surprises, having the KFC Family Fund there to help her through a tough time made all the difference. She applied for assistance in paying her medical bills. “Thank you so much, KFC Foundation, for helping me in my time of need. Words cannot express how much I appreciate it. Thanks again!”

A K F C F Quar te rl y

Fall 2017

“Financial Counseling” was the second most needed free assistance offering cited by your employees on the Spring 2017 Your KFC Voice Survey. (The most needed was “college grants.”) In response to this and other research, along with our experience with KFC Family Fund applicants, the KFC Foundation began piloting a financial literacy program in mid-2017. In our ongoing efforts to be responsive to the real needs of KFC’s frontline workers, in January 2018, the Foundation will launch a personal finance offering for all employees at participating restaurants. We believe in supporting restaurant employees inside and outside of work. We know life doesn’t always go as planned. So, we want to provide your teams with tools to prepare them for whatever comes their way. Participants will master their understanding of budgeting and money management, all while unpacking their past relationships to money. Why do you care as an employer? According to Forbes. com, employees “who are stressed [about their finances] are more likely to be distracted by their finances at work, miss work due to their personal financial issues and cite health issues caused by financial stress.”

Cole Slaw Participation in 2018 As a 501c3 non-profit organization, the KFC Foundation’s charitable programs are made possible through the ongoing support of KFC Franchisees, which comes to the Foundation via a $1.23 surcharge on each case of cole slaw. In turn, all of the Foundation’s offerings: • REACH Educational Grant Program, • Rise with GEDWorks, • KFC Family Fund, and the • Financial literacy program (new in 2018!) are only available to employees at restaurants participating in the 2018 Cole Slaw Donation Program. The annual Cole Slaw Donation Program opt-out opportunity takes place each fall for the following year. The 2018 opt-out will take place October 16 through 30. We encourage you to “do nothing” during the opt-out window to ensure your teams have access to the Foundation’s spectrum of charitable assistance offerings in 2018—more benefits for the same contribution. For information on Foundation programs, visit TeamKFC and search “Foundation” or visit KFCFoundation.org. Contact the Foundation at 800-248-5092 or Foundation@email.com. w ww. akf c f . c o m

KFC Foundation receives international honor!

The KFC Foundation recently received the Brandon Hall Group’s Gold award in the “Excellence of Learning Category for HCM Citizenship” for Educational Support at KFC. Now entering its 23rd year, the Brandon Hall Group Excellence Awards Program is the most prestigious awards program in the learning industry. Often called the “Academy Awards” by learning, talent and business executives, the program attracts entrants from leading corporations around the world, including Google, IBM, Boeing, Dell and many others. The HCM Citizenship category honors organizations that go beyond employee training and create pathways to meaningful employment for their workforce and/or their community. These organizations offer enrichment programs that educate, train and equip people with skills to help lift them to economic security. According to the Brandon Hall Group, the KFC Foundation’s comprehensive scope of employee assistance offerings is what made the organization’s award entry a stand-out: KFC and most of its U.S. franchisees have made a commitment to frontline restaurant workers through the independent, non-profit KFC Foundation to provide enhanced educational and hardship assistance benefits. One program helps workers pay for college and the other offers free, personal GED completion support. This, coupled with providing additional support to restaurant employees through their hardship assistance program and forthcoming financial literacy initiative, earned KFC a Gold Award for HCM Citizenship in the 2017 Brandon Hall Group HCM Excellence Awards.

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A KFCF Q uar te rl y

K F C F OU N DATION

REACH Educatio n

TEAM MEMBER

BUSINESS PARTNER

TEAM MEMBER

BUSINESS PARTNER

Brandon A Baker Megan E Peters Ramon Rivera Mata Jr. Chase L Thrams Trekia S Thompson Alfonso Vanegas Carlos E Cazares Jose E Robles Jr. Jennifer Jean Bray Keionna P Riddlebarger Madaline M Grimm Nathanael T Fraker Sierra D Rowland Taryn C Lowe Tyler M Stichler Andrea J Gutierrez Gillian R Anderson Jordan A Murner Myeshia S Burton Shirnecia S Travis Andrew C Pyscher Cody W Bell Jacob Carnevale Briana Rochelle Graham Allieyah Lanise Davis Dasia R Hardin Eric Anthony Baca Jacalyn M Gooch Jacob D Blue Jeremy A Mace Olivia P Hudson Rikeba N Floyd II Kamee S Davenport Leanna B Taylor Steven E Schechtel Nikole Kaleinek Alisha N Weaver Caitlin A Perry Dena M Back Abigail L Weddington Elliana Testerman Hannah Breanne Rose Madison E Cline McKenzie S Stacy Ayesha Bashar Johnstan D Prince Jirani EE Smith Ja’La Hilburn Steven J Bauman Alicia V Ruiz Emiliano F Munoz Gavin J Lutz Jesus Frutis Stephanie Sanchez Saldana Keanon Hurst Lester Bennett

Aarsand, Kurt R. Aarsand, Kurt R. Ahmed, Imran Alford Jr., William F. Arnold, Robert M Aslan, Aryeh Aslan, Aryeh Aslan, Aryeh Bagshaw, Jeanine Bagshaw, Jeanine Bagshaw, Jeanine Bagshaw, Jeanine Bagshaw, Jeanine Bagshaw, Jeanine Bagshaw, Jeanine Baker, Frederic M. Baker, Frederic M. Barr, David B. Barr, David B. Barr, David B. Bell, David D. Bell, David D. Bohm, Dennis D. Broome, Thomas A. Broome, Thomas A. Broome, Thomas A. Broome, Thomas A. Broome, Thomas A. Broome, Thomas A. Broome, Thomas A. Broome, Thomas A. Broome, Thomas A. Broussard, Stephen Byrd Jr., Jon L. Cavegn, Alexander G. Cecconi, Thomas Chambers, Keith D. Chambers, Keith D. Chambers, Keith D. Chambers, Keith D. Chambers, Keith D. Chambers, Keith D. Chambers, Keith D. Chambers, Keith D. Chowdhury, Lokman G. Clark, Charles E. Cutrer, William H. Denman, Brian H. Denman, Brian H. Desmond, Estate Of Joseph F. Desmond, Estate Of Joseph F. Desmond, Estate Of Joseph F. Desmond, Estate Of Joseph F. Desmond, Estate Of Joseph F. Duenow, Margaret A. Duenow, Margaret A.

Alexandre R Almeida Ernest K Arhin Jean K Vazquez Michael P McBirney Charles Austin L Guthrie Dalton J Emmert Brook Nicole Reid Kyambrea Cooper Rubi Perez Karina I Vazquez Kylie L Hamilton Cecilia Loera Diaz Diaz Evelin Luna Llanes Beneshia T. Waddlington Gweneshia K. Wadlington Emily Rosewitz Autumn T Pate Elvira A Grininar Connie D Detillion Jessica P Dunn Taylor K Ford Aba A Abdurahim Abel O Owusu Anna E Britt Augustine C Tugbe Jr. Bradly Lams Brendan L Brock Jennifer Trujillo Kunjan Patel Mila Broche Naomi B Cruz Rachel L Montgomery Tanya Rojas Yakira K Pope Zeamittria J Gardner Abigale M Cantrell Dylan G Newsome A’Lexus D Marshall Aaliyah Carter Aliana Tate Ana L Martinez Ashley N Robinson Charlotte M Hunt Cleotress J Euwins Haley M Mwaura Hannah N Atnip J’Tiah R Bray Katie B Pontius Korizma S Robinson Licarvio J Cannedy Masonde N Traoe Oyeolamide O Oyediran Regina Mensah Savannah L Berry Teyana A Williams

Evans, David E. Evans, David E. Evans, David E. Evans, David E. Fikes, Mark Fiori, V. Samuel Fowler Sr., Wallace W. Fowler, Chris E. Fraser, Dwight Freeland, Estate Of Richard J. Fulenwider, Charles Michael Galhandro, Manuel Galhandro, Manuel Galhandro, Manuel Headley, Paul E. Headley, Paul E. Hecht, William G. Gregg Helms, Lawrence A. Jackson, Frederick J. Kelly, Teresa L. Kelly, Teresa L. Kelly, Teresa L. KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation KFC Corporation Knipp, C. Douglas Knipp, C. Douglas Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G. Kulp, Michael G.

A K F C F Quar te rl y

Fall 2017

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Grant Winners Round 1 TEAM MEMBER

BUSINESS PARTNER

Timilehin Florence Jegede Kulp, Michael G. Vanessa Vargas Kulp, Michael G. Alexis Shelby Bryant Kulp, Michael G. Daniel Alberto Herrejon Sr. Kulp, Michael G. Jaime Lee Torres Kulp, Michael G. Kira M Marsh Kulp, Michael G. Mollie M George Lambos, George Shawnna M Duckworth Lee, Craig T. Jessica D Archuleta-Trujillo Lickteig, Jeffrey D. Hanna Johnson Luehrman, William L. Cambrea J Peterson Lyon, Walter Sonny W. Abigail Rodriguez McCann, Estate Of Virginia W. Amarya Jones Mitchell, Frank Yerenia Adame Hernandez Mitchell, Frank Mariana Miranda Olson-Utah, James Steven K Brown Olson-Utah, James Alicia E Winder Olson-Utah, James Ben K Barlow Olson-Utah, James Callahan J Blackham Olson-Utah, James Cameron M Powers Olson-Utah, James Chelsie M Conrad Olson-Utah, James Dyllan C Calwell Olson-Utah, James Felicia Johnson Olson-Utah, James Kajen D Moore Olson-Utah, James Mei Sorensen Olson-Utah, James Nathan G Willard Olson-Utah, James Nicholas N Holt Olson-Utah, James Nina N Holt Olson-Utah, James Vernon F Ingleton Olson-Utah, James Alejandra Nuno Olson, James D. Ariana Deniz-Lucatero Olson, James D. Arielle A Corbin Olson, James D. Berenice Leon Olson, James D. Briana Orozco Ramos Olson, James D. Carolina Orozco-Ramos Olson, James D. Dagney R Garcia-Morris Olson, James D. Daisy G Nava Olson, James D. Daisy Urbina Olson, James D. Gabriela Botello Ledezma Olson, James D. Hazel A Waiters Olson, James D. Ivan Hernandez Olson, James D. Janet N Hede Olson, James D. Jared E Garcia Olson, James D. Jennifer E Cacal Olson, James D. Jeremiah Michael Lopez Olson, James D. John F Beglin Olson, James D. Jonathan Cortez Olson, James D. Jose Isabel Rodriguez Negrete Jr. Olson, James D. Kenya S Hilliard Olson, James D. Luis B Romo Olson, James D. Melissa Barajas Olson, James D. Salena M Yang Olson, James D. Shawn A Gunnier Olson, James D. Stephanie A Cacal Olson, James D. Wendy A Duran Olson, James D. William J Peterson Olson, James D.

TEAM MEMBER

BUSINESS PARTNER

Yuliana Hernandez-Mora Andrea U Perez Ayanna Ewing Cody L Mossburg David Jaramillo Jr. Dorothy Smith-Jackson Duyen Thi Tran Jacob A Holdaway Jamari R McGee Jasiah Glenn-Leufroy Joseph M Placencia Jr. Kharijah Malika Winton Mercedes M Ambrose Pak Leung Lou Pavel Kostyshak Rachel J Benavidez Rachel C Coursey Salvador G Murillo Samantha M Beglin Stephanie Gomez-Limon Vasili V Zavadski Jr. Yuliana C Vargas Brianna White Ajay R Edwards Joy Paraiso Ronald C Gray Rasheeda N Toliver- Faulk Temitope Oludare Logan C Crooks Ashley J Windsor Chudi D Mbonu Melinda C Torres Oluwakemi O Fawehinmi Jr. Michael A Marenger Casey R Austin Kelly R Glenn Desiree L Holmes Kelsey Kordys Antoinettte M Thurmond Charles E Lobaugh Dylan L Cobb Fozil F Elbekov Jessica A Gallardo Louise S Poteau Benjamin C Rumney Austin Downing Chemeng Xiong Quentin N Pinchback Kaylee M Brown Makayla L Wilson Daniel Lee Mulumba Karina N Tarasyuk Andrea Smith Bishwas J Thapa Ewelina Lemanski Joseph M Kirkpatrick

Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Olson, James D. Overcash, Diane Day Patel, Hiren N. Patel, Hiren N. Patel, Hiren N. Patel, Manish Patel, Manish Patel, Pushpak Patel, Manish Patel, Manish Patel, Manish Patel, Manish Patel, Pushpak Peters, Nicholas Peterson, Mark T. Potter, Estate Of Ralph M. Robinson, Bryan Robinson, Terry Robinson, Terry Rosenbalm, Linda Day Rosenbalm, Linda Day Rozier, Gilbert D. Rozier, Ricardo D. Rudoni Sr., Estate Of Steve J. Sandhu, Gurpreet S. Saunders, Steven R. Shelton, Billy G. Shoffner, James Jeffrey Shoffner, James Jeffrey Sibert, Samuel L. Sibert, Samuel L. Sibert, Samuel L. Singh, Satwinder Skowronski, Eugene A. Slater Jr., Thomas J. Fa ll 2 017

A KFCF Q uar te rl y

K F C F O U N DATION

REACH Education Grant Winners Round 1

TEAM MEMBER

BUSINESS PARTNER

TEAM MEMBER

BUSINESS PARTNER

Mary M Smith Sarah A Draper Macy L Pyres Alexa K Wilbur Elizabeth M Ellwanger Kristen R Ponce Melissa Dimas Morgan E Rash Alexa M Rieck Amber M Cain Ameina Kaleel Annalisa J Morgan Brianna E Clark Diwash Shrestha Jeremy Canute Julie Ibanez Maria Y Bulat Shidizja M Altamirano Umeko R Ponce Julius A Ntui Nita M Melton Kaylee Susan Younk MacKenzie I Dwyer Kimberly Garcia

Slater Jr., Thomas J. Slater Jr., Thomas J. Smith, Milton E. Starkey, Larry Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Stewart, Todd Switzer, Ronald Thurston, Frederick R. Thurston, Frederick R. Tinsley Sr., George W.

Keely A Robinson Ernest Dietrich Niâ&#x20AC;&#x2122;Chelle S Samuels Allante Searcy Erica Swann Makalia M Jones Alysa Nicole Zimmermann Elizabeth A Study Lauren E Standish Paris S Frierson Ethan R Autio Breanna N Evans Darren A Hart Kaja D Tenney Zandra J Kelly Dylan Michael Nicholson Ryan J Rider Jordan T Schumacher Abigail Hammer Yislena Cruz Lita Marie Davis Tristan Z Martin Aarsand

Tuohy, Sean A. Vangeloff, Shirley S. Vangeloff, Shirley S. Vangeloff, Shirley S. Vangeloff, Shirley S. Vangeloff, Shirley S. Wasilevich, Peter Wasilevich, Peter Wasilevich, Peter Wasilevich, Peter Watland, Scott L. West, Richard M. West, Richard M. Wheeler, Chad A Wheeler, Chad A Wheeler, Chad A. Wheeler, Chad A Wheeler, Chad A Whitaker, Darren Yagoda, Daniel Zakaras, Jerome Zakaras, Jerome

AKFCF.Ad.2017.HALF PG SPREAD.ISSUE3.OL.pdf

A K F C F Quar te rl y

Fall 2017

9/20/17

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Alana Sakai Alexander Piccone Alva Sanchezaguilar Amanda Lumley Ambrosia Gomez Angela Talmonti Anna Bridges-Perez Austin Branch Autumn Branham Ayleen Alvarado Baily Leary Bethany Wooton Brandi Fairman Brittany Estigoy Brittany Kallon Brittnee Hausner Cameron Tobon Carmen Wilson Cassidy Schroeppel Celina Von Stein Chelsea Rodriguez Ciera Carithers Cindy Tietz Consuelo Paz Sanchez

Cory Tate Courtney Haley Dalton Keibler David Franco David Glass Dustin Schwab Emily Perry Faith Gabrielse Gabrielle Kline Gladys Correa Guadalupe Segovia Haily Adams Hanalei Kelii Iliana Cruz Isaiah Barry Ja’Quan Harris Jaclyn Eastwood Jacob Caruso Jenny Pomeroy Jessica Mangandid John Fierst John Janica Jonathan Bivens Jorge Hilario

Joshua Bellamy Justin Hill Kalyn Jones Katrina Martinez Kelsey Douglas Kinley Naranjo Kyle Lee Kyle Wetzel Kymberly Reeves Lacandra Thomas Lucia Herrera Camacho Lucia Sanchez Luis Rodriguez Lyah Dimoglo Madison Shisler Matthew Smith Melanie Fernandez Melissa Coutu Zayas Melissa Lyons Michael Skopis Nathanael Pelling Nicole Vasquez Norma Sotelo Rachel Drabic

Randi Sterud Rickey Wilcox Roberta James Russell “Dean,” Jr. Sabria Sellers Sean Cunningham Sophia Carpenter Stephanie Lord Summer Johnson Tad Cetnarowski Tariana Gibson Tiana Bertram Timothy Collins Traci Pluszczynski Tristan Garza Tyler Grimm Tyler White Tyler White Tyree Morris-Gordon Xavier Hartzell Zachary Durham Zackary Patterson

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A KFCF Q uar te rl y

CARIBLA Report

RSCS 2017 Regional LA&C SCM Workshop 6 By Nathan Contreras

RSCS International Sourcing Manager, and Zaira Guevara CARIBLA Marketing and Administrative Manager

In an effort to take supply chain in the Latin America & Caribbean (LA&C) region to the next level, RSCS held a Regional Supply Chain Management (SCM) Workshop at the SYSCO IFG Jacksonville Distribution Center in July 2017. The objectives of the meeting were to educate and inform the market’s supply chain leaders of the work RSCS is doing and to gain regional alignment on potential categories for the next sourcing event(s). There was also a priority to better understand the SYSCO IFG systems and processes. A total of 17 supply chain leaders from the larger markets participated in the workshop. CARIBLA Franchisee Association’s partnership with RSCS started in early 2010. A regional Program Management Service Agreement was signed for the KFC and Pizza Hut brands to provide the Latin America & Caribbean region with a dedicated SCM Program and ensure the supply of U.S-.based goods at the lowest cost possible. The Taco Bell brand was added to the program in 2012. Through the brand-specific LA&C program managers, RSCS provides a timely communication link to support the regional marketing calendar (RMF) implementation. RSCS works in conjunction with the designated franchisee SCM Committee. Since the beginning of the partnership, RSCS has provided support 42

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to the region in 77 markets operating more than 2,200 YUM! Brand restaurants. Based on LA&C spend analysis carried out back in 2013 and again in 2017, it was estimated that local purchases correspond to 60 to 65 percent of the region’s total spend; hence the opportunity to execute regional sourcing initiatives.

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The collaboration between Franchisees and partners is always a win-win scenario. This meeting exemplified how much shared knowledge and capabilities take our business to the next level. Supply chain is particularly challenging in our region with different countries and different suppliers and we discovered during the meeting how to exponentially leverage regional capabilities.” -Liza Henriquez, Panama Franchisee and Chair of the SCM Committee

As a result of the feedback from the workshop, Sysco visited the markets and presented them with a couple of program proposals that offered significant value and efficiencies. “We are in the process of implementing the first of what we hope will be several new programs.” -Mike Hedge, Sysco IFG Director of International Sales Operations

The RSCS CARIBLA International team consists of Ron Burks, senior vice president international sourcing & Pizza Hut National Purchasing Co-op; Eduardo Villegas, senior director international sourcing; Adriana Caviedes, KFC LA&C senior program manager; Brenda Quiroz, Pizza Hut LA&C program manager; Edgar Bañuelos, Taco Bell LA&C program manager; and Nathan Contreras, international sourcing manager.

On day one of the workshop, the participating markets’ spend was analyzed to determine the size and ease of potential regional sourcing opportunities. Based on this analysis, RSCS will continue to work on category management for fries, cups and lids, tortillas and buns, folding cartons, and corrugated pizza boxes. Potential new categories such as cooking oil, condiments, and pizza sauce were identified as well. “Regional Supply Chain Management alignment is critical to drive restaurant margin improvement in selected product categories. RSCS will continue to work very closely with Franchisee Partners, Suppliers and Yum! Brand team members to lead the development of regional suppliers outside the U.S. The workshop enabled the identification of potential sourcing opportunities to explore next.” -Eduardo Villegas, RSCS Sr. Director International Sourcing On day two, the group met with the Sysco IFG partners to learn and/or refresh their understanding of the systems and processes used to purchase and fulfill the orders. They also toured the distribution facility and were able to join a best practices and benchmarking session. “It was a great opportunity to meet with the supply chain decision makers from the largest YUM! franchisees in the region. The feedback from the supply chain team was very important and provided the Sysco IFG team with an insider’s view of needs and challenges. Sysco IFG presented an overview of Sysco international today and a look into the future.” -Steve Edwards, Sysco IFG Vice President of Multi-Unit Sales

Fresh products…

Fresh ideas…

KOCH FOODS… A fresh new approach to customer service and supply chain partnerships! Fa ll 2 017

A KFCF Q uar te rl y

KFC/NPC Report

Helping Your Co-Op Help Your Business 6 By David Sparks

Hello, KFC family! As your new AKFCF representative to the RSCS, I first want to thank Dale Black for all his selfless service and dedication to the AKFCF and the RSCS boards. This is not my first time on the RSCS board. In the past, I served for six years as the NCAC appointed board member to the RSCS. With my past experience, I have hit the ground running. There are many exciting projects going on at the RSCS – all in the quest to bring value to the members. And as you will read, these projects should save you valuable time and money.

Help your co-op help you save money

Your co-op has three components to our mission statement: • To maximize profitability for members of the Yum! system through top and bottom line growth; • To deliver high quality, safe food ingredients that exceed Yum! customers’ expectations; • To enable innovation through strategic partnerships with our suppliers, brands, and franchisees.

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Fall 2017

Much of the first bullet happens behind the scenes: Two consecutive years of deflation through RMI, 40 percent reduction in the cost of material for American Showman through negotiations, and flexible supply plans for Zinger and sauces have enabled top line sales without obsolescence. While you often look to us to lower your cost, we also look to you to help enable us. Specifically, we can use your help driving three programs: 1. Electronic shares Prior to this year, each member of the RSCS received a paper share for your respective co-op (for example, the KFC National Purchasing Co-Op). A transfer of a restaurant required you to locate, sign, and mail your paper share to RSCS. A new restaurant required the creation and mailing of a new share document. This is a cumbersome and costly process. How you can help: RSCS is transitioning our corporation to electronic shares, which has no impact to you as a member. We are asking those with paper shares to switch to electronic shares to help us lower cost and improve service. Please email Michael Salot (Michael.Salot@rscs.com) to convert your shares, even if you lost your originals. 2. Electronic voting Each year, KFC National Purchasing Co-Op members vote for new board members. This process is administered by an external law firm. Currently that law firm maintains two completely separate programs: Those who vote electronically and those who vote by mail. They then need to reconcile the two processes. This leads to cost and confusion; for example, one member voted differently electronically and by paper last year. How you can help: Please sign up (if you have not already) for electronic voting by emailing Alison Woodcock (Alison.Woodcock@rscs.com). 3. Send us your RMI ideas We heard great RMI ideas during our roundtable sessions in 2017. While we plan to conduct similar sessions in 2018, you do not need to wait. Send your cost saving ideas to Patrick Miller (Patrick.Miller@rscs.com) to lower your COG. w ww. akf c f . c o m

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A KFCF Q uar te rl y

Finance Committee Report

Finance Committee: Supporting the Best Interests of Members 6 By Roger Sparks

Finance Committee Chair

I would like to thank the AKFCF leadership team for appointing me the AKFCF finance chair. My term of office began on July 1. It is both an honor and a privilege to be able to serve on the Board of the AKFCF and to be able to give back to the KFC family who has given so much to my family and me. AKFCF’s mission is to unite KFC franchisees worldwide and to protect and advance their interests. To belong to such an organization, attend their meetings and to meet the people who are in our great KFC family, affords me the opportunity to gain insight and wisdom to help me in

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our business every day. Volunteering to be part of this group not only gives me a chance to give back but also gives me so much more in return. Just as I started out, I would encourage each of you to look to your own AKFCF region and participate in their meetings and functions; then volunteer your time to serve on their board or on one of their committees. Doing so begins your path to serving on the full AKFCF Board or committees. Now on to AKFCF Finance Committee business: The mission of the AKFCF Finance Committee is to work with and support the treasurer of the AKFCF in developing annual

budgets and to make recommendations to the Executive Committee of the AKFCF on fiscal policy. The Finance Committee is to act as the “eyes” of the franchisee members in an oversight capacity in all budgetary matters. This role provides transparency to the franchisee members into the financial operation of the association. This does not imply that the committee has approval authority over such financial decisions as may be made from time to time by the Executive Committee or that the committee is even in agreement with such decisions. It functions only to see that these decisions are appropriate and normal to the conduct of the association. Within the Finance Committee, we have some amazing people who volunteer their time and expertise to serve. The current members of the committee are Keith Cole (AKFCF treasurer), Bryan Robinson (AKFCF 1st VP / EC liaison), Debbie Newton, Dave Evans, Joe Oleinik, Adam Siebert, and Inman Hodges. We really have an awesome team who all work to support the mission of the AKFCF Finance Committee. Thank you to the committee members for agreeing to be a participant on this committee. I would especially like to thank Keith Cole and Past Finance Committee Chair Jim Mckenzie, who have been tremendous resources in getting me up to speed in this position. When the Finance Committee pores over the budget, there are many more aspects that our members’ money supports within the AKFCF than just Convention. Throughout this issue of the AKFCF Quarterly, you will read of many initiatives and projects that your dues support, including the world class magazine that you are reading now. As you read this and other articles, pay attention to the many people and projects that the AKFCF utilize and support on the behalf of our KFC family. Thank those people if you see them for all of the hard work that they do on our members’ behalf. As for the Finance Committee, we will do our best to be your “eyes” into the budget of the AKFCF that support those initiatives and projects, and offer up our best thoughts and ideas to the Executive Committee and the BOD, and to always represent the best interest of all of our members. w ww. akf c f . c o m

Upper Midwest Regional Short

Consolidation Concerns 6 By Kevin Schlutz

AKFCF & UMW Regional Secretary

Whether fortunately or unfortunately, I can remember when a KFC with $500,000 in sales was a good thing, and it made lots of money. But that was 40 years ago, and times have certainly changed a lot since then. I’ve watched while the cost of doing business has increased on many fronts; our city, state, and federal governments have added their own layers of costs. The actual business of operating a restaurant has become increasingly complex and very difficult for a smaller operator to keep up with in many different areas. These days even million-dollar restaurants aren’t immune from struggling to make a profit. That’s why the goal now is for $1.5 million or higher restaurant sales averages. What that’s done over time is made it increasingly hard for our smaller operators, which once made up 85 percent or more of the 700 plus domestic franchisees of KFC, to stay afloat based on the income from their one or two restaurants. Add into that new equipment or upgrading and it starts to be hard to make everything work. It might be better to sell what you’ve worked to build your entire career. With the recession that started in 2008, and for years after that, there were few buyers for those who wanted to sell their restaurants, and many of them just ended up closing because they weren’t viable anymore. But in the last three years or so, since the brand became more vibrant and attractive again, a tremendous amount of consolidation is occurring, as mid-sized to larger operators have found those smaller operators willing to retire or move on. Adding additional stores, in most cases, lowers overhead

and improves results. What started out as refranchising has morphed into incorporating surrounding operators. Because of that, the total number of KFC domestic franchisees this year has dropped to a new low of 467, and it continues to drop with 19 less this year so far. The trend will seemingly continue since 69 percent of those 467 operators still own one to four restaurants. So why am I talking about consolidation in an Upper Midwest regional article? Just this year, we lost nine operators in the Upper Midwest, with other possible deals pending on top of deals that closed last year. Almost 50 percent of the lost operators in the system this year have come from the Upper Midwest. This consolidation is going to have significant lasting effects on our regional association if it continues. Fewer members means fewer potential directors, representatives, and officers. It means a bigger cut in meeting attendance if even just a few operators don’t participate – and that translates into all kinds of other issues for planning meetings, electing representatives, and helping fellow franchisees or new franchisees. Remember, our regional meetings have always been to educate, develop, inform, and share with our fellow operators – big or small. Larger operators have just as much to share and learn as anyone else. We certainly don’t want to lose the Colonel’s legacy of a family culture and caring for our fellow operators. He was the one, after all, who encouraged the franchisees to organize themselves, to work together, and to help each other. I have some wonderful memories of

going with other neighboring franchisees to help open a new restaurant in our area or helping a neighboring franchisee solve a problem they were faced with. Becoming a director, officer, or representative for your region is just doing that on a larger scale. We’re very proud of our history of representation in the Upper Midwest, but to be effective the region requires members willing to serve, whether in small or large ways. Understand that you don’t have to be the franchisee to serve. Many above store leaders, with their franchisee’s blessing, have served very ably on our boards and committees. I believe every person who has ever served in one of these positions believes they are better off for having done so, and their neighboring operators benefit as well. All that being said, I am not against consolidation. We purchased a neighboring restaurant this year, and it was a good result for both of us. What I am saying is that each member lost through consolidation makes it just that much more important for those remaining to be active in their regional associations and the AKFCF. If they aren’t, it is going to become very difficult to sustain the progress we have made as a region and as a system. The AKFCF, made up of the regions, has benefitted everyone in the KFC system over the years in many different ways and continues to deliver on our promise to “Unite KFC Franchisees world-wide and to protect and advance their interests.” It’s easy to be a passive benefactor of all the region’s and the AKFCF’s hard work, but it is much more rewarding to be a part of it. Fa ll 2 017

A KFCF Q uar te rl y

S . W. R e g i o n a l S h o r t

Southwest Franchisee Association’s Celebration for Success and Education 6By Franklyn Nye

The Southwestern Association RGM Celebration was held this April at the Crown Plaza in Dallas. Upon arriving at the venue, all of the participants were given a backpack stuffed with a SW Association logoed pen, pad, and key chain – all donated by the Mark Peterson/Krystal Burge Group. At the celebration, we welcomed 39 vendors who shared the full capabilities of their products with the 175 RGM, ARL, and franchisees in attendance. Our franchisee groups, KFCC, and our vendor partners created workshops for the members to attend; they provided an in-depth look at the ways and means to increase sales and profits by suggestive selling. Pepsi and Dr. Pepper provided an abundance of t-shirts to shoot out of an air cannon into the crowd. Everyone was kept pumped up with the tunes provided by Justin and Jon Stewart. It never hurts to have 100 pounds of candy either!

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During the celebration, attendees were able to attend four different and very exciting workshops put on by KFCC, our vendors, and other franchisee groups such as KBP Foods, the Stewart Restaurant Group, and the Peterson/Bruge Group. The association decided to do something a little different this year by holding a casino night event. Everyone attended dressed in roaring ‘20s costumes. The association held contests for the Best Dressed Guy and Girl, Most Elaborate, Most Authentic, and Fan Favorite. Participants were able to turn in their winnings for tickets – one ticket for every $1,000. They then put those tickets, one or all, into buckets in front of one of the 20 different, amazing prizes that were on stage at the end of the night. To see photos of Casino Night fun, visit www.swkfcfa.org. The next day everyone was excited to hear from our leaders Phil Klezmer,

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Eric Trett, Brittney Bradley, Hugo Ferrel, and Lyle Palmer. The informational discussions for the day included Zinger Sandwich, Protecting Our KFC Brand in Today’s Social Media World, 1-800 Update, and Putting It All Together. Everyone departed on a high note, looking forward to what the next months will hold. Author’s Note: The planning committee for the SW Association, headed by Roger Sparks, is in the process of creating the 2018 RGM Celebration. We are sure it will be exceptional and exceed the one I have just reported on. Remember, it was not good; it was FANTASTIC.

Board of Directors Meeting

At our June Board meeting, we had six of our sponsors represented. They were able to discuss their products and their benefits. We also requested the attendance of a member from our franchisor so they could provide us with insight into the future for KFC; Jeffery Urbanik did just that. Thank you!

During the meeting, one of our topics of discussion was the creation of membership informational packets to be sent out to our members and non-members so that they have the information on the SW Association, the AKFCF, and the PAC available to them, as well as information on the benefits of being a member. Digital and hard copies were sent out the first part of September. We also had a fantastic interactive development workshop presented by Bridgett McGowen-Hawkins. Bridgett took us through the processes of finding, hiring, working with, and retaining the millennial generation.

Over the past year our association has worked hard to build up our regional attendance and membership. We’ve been working to reach our members, verifying their contact information, and reminding them that we are here, working for them!

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A KFCF Q uar te rl y

R S C S

Member

Programs

Operator Savings with RSCS 6 By Lindsay Krebs

Your RSCS Member Programs team is hard at work to provide national operator programs and employee programs, which offer unique value through negotiated pricing, as well as favorable terms and conditions. Each year, we create personalized operator savings reports for our members. Savings were calculated for each program based on supplier reporting of actual 2016 usage by RSCS members at RSCS discounted pricing, as compared to market price, to give you an idea of just how much you’re saving with these programs. Systemwide operator savings for 10 of our top programs were a record breaking $19,139,949 in 2016! Let’s take a deeper look at a few areas where operators saved the most in 2016:

Shipping - $7,695,808

The RSCS shipping rates with UPS and FedEx are truly

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phenomenal! Operators can save up to 75 percent off published UPS rates! Many operators use these rates for shipments between their stores and for weekly payroll shipping. Regardless of what you’re shipping, the RSCS pricing makes a huge impact on your shipping rates.

Waste & Recycling - $3,496,644

KFC stores using the RSCS Waste and Recycling program save an average of $1,412 annually! RSCS works with four national providers—Waste Management, Republic, Westrock and SLM to provide exceptionally low rates. The program provides nationally discounted, all-inclusive pricing (no added fuel or other fees) to satisfy your specific needs.

Beverage Grade CO2 - $2,184,332

More than 14,000 stores are currently saving on Beverage Grade

CO2 through the RSCS program. RSCS has partnered with NUCO2 for several years. We are excited to announce that we’ve added Airgas as an additional supplier in this category! Whether you rent or own your tanks, you can leverage the discounted per pound rates through the RSCS program.

Office Supplies - $714,714

You can save over 50 percent on some of the products you use most in your stores and offices! RSCS has programs with both Staples and Office Depot that allow you to save when you shop in-store or online. In addition to office supplies, Staples offers custom, logoed business cards, letterhead, and stationery. These are just some of the ways you can Grow Your Savings with RSCS Member Programs! To learn more about any of the programs mentioned above or to sign up, please visit the Digital Directory at www.rscs.com/ memberprograms.

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Here’s an example Operator Savings Report for a 25-store operator using all of the 10 programs. That’s a savings of over $112,000 per year! Want to see how much you saved using these programs in 2016? Contact memberprograms@rscs.com for a copy of your company’s personalized report. We’re already looking forward to saving even more in 2017!

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A KFCF Q uar te rl y

Executive Director U p d a t e

Anaheim – A Magical Place to Hold Your Family Reunion in 2018 6 By Kelly Rodenberg

As Eric Overcash wrote in his President’s Report in this issue, our national convention is like a family reunion for all the extended relatives, no matter what branch of the family you belong to. From young to old, Anaheim provides something for everyone in your family to experience. We have never held the Convention in Anaheim and, as with Austin, we think this new destination will prove to be a noteworthy one. This sundrenched Southern California city, located between Los Angeles and San Diego, is best known as the home to Mickey and Minnie – yes, Disneyland®. (Please check our Convention website for discounted tickets to the Disney® theme parks.) This destination offers worldfamous theme parks and attractions, celebrated restaurants, award-winning local craft breweries, specialty shops, pro sports, cultural museums, top entertainment, and unlimited outdoor recreation. On Saturday evening, we will close the week with a Picnic Style Party outside in the Plaza area between the Marriott and the Anaheim Convention Center. This will be an informal, fun-filled night for family and friends under the stars. Enjoy our very own KFC for dinner, engage in a few rounds of corn hole, shuffle board, basketball hoops, and other 52

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interactive games. Dance and sing to the music of the LA AllStars, one of southern California’s top cover bands. Want to venture out for a day trip? In under two hours, the animal lovers in your family can easily arrive in San Diego and spend the day at the world famous San Diego Zoo, Safari Park, or Sea World. San Diego Zoo covers 100 acres and is home to more than 3,500 rare and endangered animals representing more than 650 species and subspecies plus a prominent botanical collection with more than 700,000 exotic plants. If you have never been, it is one of the best zoos in the country. If you are looking for a more up close and personal experience with the animals, you may want to visit the San Diego Zoo Safari Park. The Safari Park is an expansive wildlife sanctuary that is home to more than 3,000 animals representing more than 300 species. Its renowned botanical collection represents 3,500 species and 1.75 million specimens. Over half of the park’s 1,800 acres have been set aside as protected native species habitat. San Diego Sea World is where the aquatic world comes alive. Experience one-of-a-kind attractions, thrilling rides and up-close animal

interactions. (By the way, the Manta Roller Coaster is one of my daughter’s favorites!) Even if you are not about the amusement parks, Anaheim is within close proximity to many popular coastal towns including: • Huntington Beach. Known as “Surf City USA,” this relaxed beach community is 15 miles from Anaheim and features boutique shopping on Main Street, a beautiful pier, and the newly opened Pacific City with views of the ocean at almost every turn. • Laguna Beach. Home to many internationally renowned artists, this beach city is 20 miles from Anaheim and offers unique dining, tree-lined streets and some of the best views of the entire coastline. • Newport Beach. This community is 15 miles from Anaheim and is home to Roger’s Gardens, Fashion Island, Sherman’s Library & Gardens, and the famous Balboa Island Ferry. As you can see, it’s time to start planning YOUR FAMILY REUNION in Anaheim. We promise that your family will not get bored! For more information, go to www.visitanaheim.org. w ww. akf c f . c o m

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A KFCF Q uar te rl y

Legal Update

Strengthening the Brand One Project at a Time 6By Ron Gardner

ASAP Remodels As you probably know, the Company announced in June, through a Town Hall meeting and subsequent follow-up communications, that the ASAP program needed a “jump-start.” Because of multiple problems that have developed in the existing program, the Company is looking for ways to diversify the options 54

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“

Fortunately, over the last several years, virtually all parts of the KFC family have been working together to make sure that problems do get solved quickly.

“

As legal counsel for the AKFCF, my days are frequently filled with members calling to talk about difficulties they are facing in the operation of their restaurants, difficulty with remodeling, and difficulty being profitable. My job – besides listening to their issues and determining whether or not they have legal complaints that I might be able to directly help them with – is, in part, to direct them to who in the KFC constellation might be able to help them solve their problem. Additionally, I am occasionally called upon to motivate those other individuals to provide sufficient assistance so that problems may be solved quickly and efficiently. Fortunately, over the last several years, virtually all parts of the KFC family have been working together to make sure that problems do get solved quickly. That includes our partners at KFCC, the NCAC, and the RSCS. This quarter, I would like to share with you at least three examples of how we are all working together to make the brand better.

that franchisees have in order to accelerate the remodel of their locations to get the benefits of the American Showman remodel. Working together, representatives of the Company, the NCAC, and your AKFCF developed a test program that is currently underway. In this test, approximately 100 stores are engaged in remodeling outside of the existing ASAP program. What we are looking to determine is whether or not these remodels can be completed more efficiently and at

a price that is comparable to what could be done within the confines of a national program. It is the current intent that this test will be finished by the end of the fourth quarter. At that point, all interested parties will take a look at the results to determine whether there is a desire to expand this program or develop alternates that will keep the portion of the brand turnaround that focuses on asset upgrades moving forward. This effort, to resolve problems that have arisen and find ways to address them, is just one of the many ways your franchisee leadership and the Company are working together rather than at cross purposes.

The Restaurant Economics Committee The Restaurant Economics Committee (REC) is a committee that was formed as part of the Acceleration Agreement. Among other things, the REC is charged with conducting periodic studies about the economic health of the system at the unit level. A big charge indeed. A study of the system at the unit level is akin to the econometrics study that your AKFCF undertook for its membership in 2014. Essentially it examines how individual stores compare to others who fit its same demographic profile (e.g., geographic location; enterprise size; volume band; etc.). Of course, a w ww. akf c f . c o m

large study of this issue is cumbersome and extremely expensive to undertake on any sort of regular basis. Accordingly, the REC has been working on a potential mechanism to discharge its duty without imposing such a large expense on the system – a mini econometrics study. Through this program, if it works, a vendor will examine the confidential financial data provided by a small sample of volunteer franchisees, making sure we are getting the appropriate amount of data from the different demographics that are necessary. By using a small but representative sample, we can manage both costs and give the REC the data it needs in order to discharge its obligations. Currently, lawyers for the potential vendor that has been chosen, KFC, and the franchisees are working through the necessary confidentiality requirements and vendor relations agreement, with the idea that a test will be run sometime in the fourth quarter to create a report based on this data. I am excited about this project, as I believe it is emblematic of a promise kept by KFC as part of the Acceleration Agreement. My thanks to Trip Vornholt and the rest of the REC for staying the course on this important project.

advertiser INDEX

Page ADVERTISER

49 American Security Products

19 Auspex Capital

14 Café Valley Bakery

13 Capitol Light

C2 The Dallas Group of America Inc.

25 DelaGet

C3 Dr Pepper Snapple Group

40, 41 Ecolab Kay Chemical Company

44 Envysion

53 FSV Payment Systems

Technology Changes

I get occasional complaints from franchisees about the technology services that they are receiving from our current broadband providers. Those complaints, coupled with the need to bring our technology platforms up-to-date (e.g., making data transmission between you and KFC faster and more efficient, as well as providing what customers in the 21st century expect in your restaurants), have compelled an examination of which and how many broadband providers we should have. Recently, both the Technology Committee and the NCAC Contracts and Facilities Committee have examined the possibility of a revision to the Merit Agreement to go to a single provider with respect to broadband services. The Contracts and Facilities Committee has charged Raja Patil and I to work with KFC Legal to attempt to see if an agreement that, on balance, gives franchisees more of an advantage than the current system. If that happens, we will then be talking more to you about the advantages of a single provider (if it turns out that there are some), and whether or not we believe it is in everyone’s best interest to modify or waive the current Merit Agreement requirement that franchisees be offered at least two different broadband providers. As this project continues, we will have more to report. One project at a time, the brand is getting stronger, and our relationship with KFCC continues to strengthen. It is my commitment to you to continue to do everything I can to make sure your interests are adequately protected and that everything we work on is for the benefit of the franchisees.

9 GOJO Industries Inc. 45 Gycor International 5 Heritage Parts

15 HME

32 Illinois Wholesale Cash Register

37 KFC Foundation

43 Koch Foods

23 NDA Inc.

1 Pacific Premier Franchise Corporation

3 Pepsi Cola

51 Pilgrim’s

31 Procter & Gamble Distributing

11 R.F. Technologies

6, 7 RSCS

46 Sprint Wireless

53 Valley Proteins Inc.

27 Welbilt

C4 Winston Industries

53 Worcester Industrial Products

This column is for the general information of members of the AKFCF and should not be relied upon as legal advice. Please see your own attorney or professional advisor for questions concerning your franchise agreement. Ronald K. Gardner is General Counsel of the AKFCF and Managing Partner of the law firm of Dady & Gardner, PA. Fa ll 2 017

A KFCF Q uar te rl y

L o o k i n g

Back

A K F C F Quar te rl y

Fall 2017

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Fa ll 2 017

A KFCF Q uar te rl y

the

FLEXIBILITY

of size and ease Cook 18-head vs. 16-head per batch in less space. Convert easily to open fryers.