AKFCF Spring 2016 by Lionheart Publishing Inc.

SPRING 2016

2016 AKFCF CONVENTION

Relive all of the fun, exciting, and educational moments from the 2016 AKFCF Convention in Atlanta where we celebrated our heritage and began building our future.

Also Inside: Service Awards • Shining Stars • Jim Sullivan • GAC Report

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CONVENTION

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2016

Relive all of the fun, exciting, and educational moments from the 2016 AKFCF Convention in Atlanta where we celebrated our heritage and began building our future.

2016 Convention Wrap-Up The 2016 Annual AKFCF Convention took us on an amazing journey of twists and turns through “Hotlanta.” It was a great week filled with opportunities to learn, to grow, to reconnect, and to just have some plain old fun. Read the complete wrap-up beginning on page 18.

Also Inside: Service Awards • Shining Stars • Jim Sullivan • GAC Report

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GAC Report

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The AKFCF GAC would like to thank all those who attended the Convention, donated to the GAC, and made their 2016 PAC contributions!

2016 Convention Wrap-up

By Kelly Rodenberg and Cory Sekine-Pettite

Our theme was “Celebrating Our Heritage, Building Our Future.” Let’s remember this: it is our privilege to celebrate our heritage and it is our responsibility to build our future. Thank you all for making the 2016 Convention one to remember.

2016 Shining Stars By K.K. Snyder

Here we introduce you to the latest group of Shining Star recipients, each of which brings their own story to the KFC Family table.

2016 Franchisee Service Awards By Paul Gereffi

If longevity is one measure of success, then KFC franchisees stand second to none.

The 9 Mission-Critical Issues Foodservice Operators Will Face in 2016 (and what to do about them)

From the Editor By Michelle Hunt

By Dan Gans and Mary Donohue

NCAC Report By Tom Slater

10 In the News 60 OEC Report

By Bryan Robinson

62 CARIBLA Report By Zaira Guevara

66 RSCS Resource Services By Lainie Yarmuth

68 Regional Short By CJ Waters

69 Executive Director Update By Kelly Rodenberg

70 Legal Update By Ronald Gardner

72 Looking Back

By Jim Sullivan

Now is the time to jump on the key issues we’re likely to be facing in the next 12 months.

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The 2016 Convention Was Truly Inspiring 6

By Michelle Hunt

The excitement continued at the 2016 AKFCF Convention in Atlanta. From the Georgia Mass Choir and NASCAR’s Greg Biffle to the keynote from Erik Wahl, internationally recognized graffiti artist and entrepreneur, and the continued tangible partnership with our KFCC leadership team. The Convention was full of partnership, education, recognition, and fellowship. It was truly an inspiring event with immense opportunities for engagement and active learning. Congratulations to Chris, the Convention Committee, our vendor partners, and KFCC for coming together again for such a great event. I look forward to seeing all of you next year in Austin, Texas! If you were not able to attend, we missed you and you missed out! However, as always we’ve packed this issue with a recap of everything from awards to social gatherings to help you feel as though you were there and allow the rest of us to reminisce on a great Convention. You will find the wrap-up article beginning on page 18. The Convention is always a place of recognition from both our Association and the corporation and, as usual, there was no shortage. Within the Convention recap, we feature the Association’s three highest honors—Lifetime Achievement, President’s and Colonel’s Legacy awards— in addition to the NCAC’s Hard Way Award, KFCC’s P.E.T.E and their own President’s award. On page 46 we highlight the KFCC 40-, 45-, and 50-year Service Award recipients and interviewed a number of them on their long history within the KFC family. The Shining Star award, initiated by past president Fred 4

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Bauer, has become a means of recognition for franchise volunteers and friends of the Association who are “shining” within their region, committee or the AKFCF. We honor the recipients beginning on page 38 and get their reaction to being selected. The Government Affairs Committee updates us on current topics as well as lists the most recent PAC contributors for 2016. For more information about contributing to the AKFCF PAC or how you can get more involved, please contact Ray Aley, treasurer of AKFCF GAC/ PAC at (802) 318-4705, or via e-mail at KFCRay@aol.com. Please don’t forget to read through our committee updates to ensure you have all the information and tools to help you succeed in your business. In addition to the NCAC, and NPC we have columns from CARIBLA, Jim Sullivan, OEC Chair Bryan Robinson, our AKFCF president, executive director & legal counsel. It was great to see so many of our family members in Atlanta as we continue to celebrate our heritage and build our future, and I look forward to seeing many of you throughout the year. I want to take a moment to thank my assistant editors, Sharon Clawson & Julie Mantlo; publishing editor, Cory Sekine-Pettite; and our international liaison, Zaira Guevara for all their hard work on this magazine and throughout the past year. It would not be possible without each of them! Warm Regards,

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

The AKFCF Quarterly is the voice of today’s franchisee family and supports the mission of the Association of Kentucky Fried Chicken Franchisees, Inc. AKFCF EDITORIAL TEAM AKFCF President Chris Fowler Editor Michelle Hunt Assistant Editors Sharon Clawson Julie Mantlo Editor Emeritus Jeanine Rosselot Darlene Pfeiffer AKFCF Administrative Director Debbie Newton Communications Chair Kevin Schlutz Past President Joan Bowling 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 Sharon Clawson 70 Clinton Plaza, Clinton, IL 61727 Phone: (217) 935-3939, ext.15 SharonC@restmgt.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., 506 Roswell Street, Suite 220, Marietta, GA 30060. Copyright ©2016 AKFCF, Inc. All rights reserved. Articles may be quoted with credit to the source. Information in the AKFCF Quarterly (ISSN 1071-9873) 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. 506 Roswell Street, Suite 220, Marietta, GA 30060 USA 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 Cory Sekine-Pettite, ext. 220 cory@lionhrtpub.com Art Director Leslie Proctor, ext. 228 leslie@lionhrtpub.com Advertising Sales Aileen Kronke, ext. 212 aileen@lionhrtpub.com Sharon Baker, 813-852-9942 sharonb@lionhrtpub.com Reprints Kelly Millwood, ext. 215 kelly@lionhrtpub.com w ww. akf c f . c o m

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Of Regional Reps And Shadows 6

By Tom Slater, NCAC Vice-Chair

Each spring, four NCAC regions come up for re-election. This year, Regions 2, 5, 8, and 9 held uncontested elections, with two past representatives deciding not to run for another term. In Region 2, Rep. Jim Liguori decided against running for another term so that he could focus more on his growing partnership with Tabassum Mumtaz and Ampex Brands. Jim served on the Committee for nine years, during which he also served on the Calendar, Contract & Facilities and Beverage subcommittees. Jim was involved in many other assignments, including the Beverage Contract and the McLane supplier distribution contract negotiations. Among other things, we owe Jim a big “thank you” for his leadership in helping grow our beverage sales and that big rebate check we all received last year! Joan Bowling was elected by the Region to serve as their new representative, effective July 1, 2016. Joan served on the NCAC when she was AKFCF President, and it will be a pleasure to have her back. John Pankratz, representative for Region 5, also decided not to run for re-election after nine years on the Committee. During his tenure, he also served on the Marketing SubCommittee, where he was the POP Functional Leader, as well as the Operations Excellence Committee, and 1-800 Committee. John made many contributions over the years, but most recently he was vital in developing the 8

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new 1-800 program launched last year. Additionally, he helped redesign the structure of the OEC for the future. Jody Luihn will be the new representative for Region 5. While Jody has not served on the NCAC, for the past two years he has been a member of the Marketing Sub-Committee, as well as chair of the Beverage Sub-Committee. With Jody’s experience on the Taco Bell FRANMAC Board, I am confident that he will be a strong addition to the team. Both Mike Kulp (Region 8) and I (Region 9) were elected to serve another term. We both truly appreciate the opportunity these regions continue to give us to help lead and guide this Brand. This brings me to shadows. Both Joan and Jody have shadowed for their regions for the past year, so they know what to expect from their upcoming term. Equally important, the rest of the board has had the opportunity to work with them and understands all that they will bring to the table to make this board better and more effective. I’ve talked about the NCAC’s shadow program in this magazine before, but I’d like to again remind you of the opportunity. In the spring of 2017, four more regions will have elections (Region 3, Marcus Shelton; Region 6, Brian Denman; Region 10, Pushpak Patel; Region 12, Todd Stewart). Even if the current representatives decide to run, the regions owe it to themselves to ensure they have the best of the best

representing them, and they should give other franchisees the opportunity to see if it’s something they might want to consider in the future. Even if shadowing isn’t right for you, perhaps you want to consider serving on one of the NCAC SubCommittees. We’ve recently introduced a program that allows anyone in the system to put their name in the hat for consideration on the Marketing, Operations and Operations Excellence Committees. Deadline for nominations is June 1 for this year, but if you have any questions, please reach out to our Executive Director, Cynthia Koplos, or to your NCAC representative as soon as possible. Finally, I do want to thank Chris Fowler, who has served on the NCAC for the past year as the AKFCF President. Having been president of the AKFCF before, I can tell you from personal experience that this is no small feat. Both roles take tremendous time and commitment, and Chris did both admirably and without losing his terrific sense of humor. We look forward to also working with Greg Atwell as he takes on these responsibilities in the coming year. The NCAC remains very busy, working closely with the Brand to provide feedback and input on programs designed to drive sales, transactions, and profits in all of our restaurants. As always, if you have any feedback on how we can do a better job serving you, please don’t hesitate to reach out to me or to your regional representative. w ww. akf c f . c o m

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Darlene Pfeiffer Calls Lifetime Achievement Award Gratifying Darlene Pfeiffer seldom cowers from a challenge, whether it be taking on a corporate giant or working hard to prove herself as a female business owner in the 1960s. She is a known pioneer, entrepreneur, role model, fashionista, people’s champion, and philanthropist in area circles and throughout the United States. Last month in Atlanta, Ga., the Port Ewen, N.Y., resident added another title to her big bucket of accomplishments: A Lifetime Achievement Award from the Association of Kentucky Fried Chicken Franchisees. Pfeiffer, who opened her first franchise on Foxhall Avenue in Kingston, N.Y., in 1967, said she was honored by the award recognizing all she’s done for fellow franchise owners nationwide. “It was mainly for my years and years of service to the franchisee community throughout the country,” Pfeiffer said. “One thing people don’t realize about KFC is that franchisees are a family. We’re very close. The Colonel [Harland Sanders] started it that way. He would stay in people’s homes when he would give away his franchises. He never sold them.

“When a new franchisee came on board, they would be visited by other franchisees to help them get their restaurants open, which I had here almost 50 years ago, so it’s a great honor from people who are like my family.” One of the most notable things Pfeiffer did for them was taking on soft drink and fast-food giant PepsiCo, which bought the company from R.J. Reynolds in 1986. Before that, Sanders’ Louisville-based company was owned by two others, including Heublein, a liquor producer and distributor (think Smirnoff Vodka). “Through these years of transition, we were like a cash cow for each owner, but they didn’t do anything for us…so it was imperative that the franchisees stuck together and we fought to keep the chicken business intact as it was when the Colonel first started it,” Pfeiffer said. That included Sanders’ company motto of “fresh, never-frozen chicken,” as well as the Kentuckian’s legendary pressure method of frying poultry. After PepsiCo took it over, company officials sought to sell the famous “finger-lickin’ good”

chicken at grocery stores. As the president of the franchisee association, Pfeiffer led the way to stop that. “I was this little franchisee with four restaurants in the Hudson Valley and the first woman president of the association, but I said we are not going to allow that,” she said. Under her leadership, the franchise association filed legal action in federal court against PepsiCo in 1989, a lawsuit that it won after an eight-year battle. That’s been pretty much the story throughout her illustrious career in the chicken business, which got started for the former TWA flight attendant in 1966. “It was a real challenge because there was a lot of discrimination against a woman borrowing money by herself,” said Pfeiffer, the first woman to open a KFC franchise in New York. “I had to give more than 50 percent of the stock to my then-husband because I was a woman and couldn’t sign the loan by myself. “I remember it well. It was Saugerties National Bank, and I knew the president real well. I said, ‘John, why can’t I do this?’ and he said, ‘because you’re a woman. You could get pregnant and not pay us.’ Can you imagine that today?” Pfeiffer went on to carve a name for herself in the Mid-Hudson Valley as a

CONDOLENCES Evelyn Delma Johnson (1929-2015), franchisee and mother of AKFCF Family members Brian Johnson and Donna Coulter, passed away in November 2015. Evelyn is remembered by her three children; Brian, Cindy (Brian) Dueck, and Donna; nine grandchildren; 12 great grandchildren; and her two sisters, Joey Sweeney and Marie Gheyssen. Mickey Keith Acree, 74, of Perry, Fla., passed away Jan. 27, 2016. After serving in Vietnam, he became a franchisee in 1966 with business partners W.H. Acree, Jr., and Rudolph Hooks, Sr., serving the Lake Okeechobee, Fla., area. The second-generation business partners are nieces, Doris Acree Lewis and Lisa Acree Barton. Mickey is survived by his wife of 49 ½ years, Nina Dale Powell Acree; two children; sister; Judy Acree Arthur; nine grandchildren; and 17 great grandchildren. 10

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Martin Dunbar Jr. (1927-2016), one of the first African American KFC franchisees in the Southeast, passed away on Feb. 10, 2016. A veteran of the Korean War, Dunbar was awarded the Combat Infantry Badge and a Bronze Star for heroism. He is survived by his wife of 60 years, Ann G. Dunbar; his children, Martin D. Dunbar, III; Margaret Dunbar-Demaree; Daughter in-law Janice Mayberry-Dunbar; and four grandchildren. Dolorous Bernice Kerr, 91, of Mankato, Minn., passed away Mar. 22, 2016. Dolorous was born Feb. 14, 1925 in Hampden, N.D. On Nov. 28, 1946 she married Donald Kerr in Minneapolis. She retired in 1990. Dolorous is survived by her children, Patricia (John) Rezin, Dianne (Barry) Golbom, David (Judy) Kerr, and Lynette Johnson; 10 grandchildren; nine great-grandchildren; two sisters; and a large extended family.

William Kirk Hannon, 51, of Ridgeland, Miss., passed away on Mar. 22, 2016. Kirk was proud to be part of the family ownership of a number of KFC restaurants throughout the central Mississippi area. He is survived by his wife, Stacey Womack Hannon; two daughters; two step-sons; and two brothers, Mitch (Becky) and Mike. Charles Middleton, 79, of Johnson City, Tenn., passed away on Mar. 30, 2016. The former franchisee opened his first KFC in Elizabethton, Tenn., in 1968. Over the years, he served on many advisory committees, including as president of KFC NFAC, president of SEKFCFA, and president of the Knoxville Advertising Co-op. He is survived by his wife of 57 years, Pat Stubbs Middleton; three daughters; and six grandchildren. w ww. akf c f . c o m

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successful businesswoman and philanthropist. Over the years, she expanded the KFC Colonel’s Scholars Program, which awards up to $20,000 to high school seniors to complete a bachelor’s-degree program, and has since funded several scholarships for Hudson Valley students, including single parents. Pfeiffer further hosts a yearly luncheon for scholarship recipients and is always looking for ways to help them. “One time, this lady got there early, and she was really nervous. I found out later that she didn’t have anything to wear.” Pfeiffer was so struck that she opened “Start Here, Go Far,” a clothing boutique on the SUNY Ulster campus for needy students. In recent years, she started the Darlene L. Pfeiffer Center for Entrepreneurial Studies, which supports the study and execution of entrepreneurial business development and management. The endowment was the single-largest gift and pledge to the community college by a living donor, earning her recognition from the New York Community College Trustees with the Benefactor Vision for Tomorrow Award. Pfeiffer also gives regularly to community feeding programs such as the Clinton Avenue United Methodist Church’s annual Thanksgiving Day dinner, where she donates mashed potatoes and biscuits. “The reason I give so freely is that I have been so very blessed with my KFC franchises, knowing the Colonel, and with the great people who work with me. I love people and try to pass on my blessings to others,” said Pfeiffer, a self-described spiritual person. “There’s a lot more to do, and I have to include that in my prayers every day. I ask, ‘Lord, just show me what direction you want me to be in.’” Source: HVNN.com

T&S Brass Introduces ChekPoint Hands-Free Faucets Every year, about 48 million Americans get sick from eating contaminated food, according to the Centers for Disease Control and Prevention. Recent norovirus outbreaks have brought renewed focus on hygiene and hand washing in foodservice kitchens. The spread of germs from food workers’ hands accounts for 89 percent of outbreaks in which food was contaminated by food workers, reports the Environmental Health Specialists Network, part of the U.S. Department of Health and Human Services. Safe, thorough hand washing is one of the easiest, most effective tools against food contamination. Many experts recommend using paper towels to turn off faucets after washing to prevent recontamination, but there’s an easier way—hands-free sensor faucets. Sensor faucets use beams of infrared light to activate water flow, keeping hands that may be contaminated by handling raw foods or garbage from touching the faucet. T&S Brass’ ChekPoint faucets offer the convenience and hygiene benefits of hands-free washing while also saving foodservice operators resources and money. The installation of electronic sensor faucets is one of the fastest-growing conservation efforts in foodservice. Sensor faucets save as much as 70 percent in water use and heating cost while also reducing the spread of germs and improving sanitation. Faucets are available with AC/DC power and hydro-generator options, ensuring they’ll be reliably available in any situation. And ChekPoint faucets feature an all-metal design and heavy-duty construction and come with T&S’ legendary reliability. Learn more about ChekPoint faucets at www.tsbrass.com.

Some Hungry Virtual Architects Built a KFC In Minecraft KFC certainly knows its target audience. The world’s largest fried chicken restaurant recently employed Moscowbased PR agency Hungry Boys to advertise in Russia, and the result was a competition held in the virtual world of Minecraft to design the most impressive KFC restaurant, one brick at a time. Sprin g 2 016

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Minecraft is a pixel-based sandboxstyle game in which users can explore, fight, and gather resources, or simply build stuff. Construction in Minecraft has become an art form; users must manually assemble their visions from raw materials, like a modern Etch A Sketch. While building unusual things in Minecraft is nothing new—players construct everything from enormous buttocks shaped planets to a 100-floor, 7-million block Tower of Babel—the idea of sanctioning a viral ad campaign through the game is unique. The KFC contest took place on a dedicated server, and almost 2,000 pixelated KFC restaurants were constructed in an effort to claim the grand prize: an Oculus Rift virtual reality headset. Some virtual foremen took the traditional

approach, aiming to build an accurate representation of a real KFC franchise, while others opted for a more grandiose style, building elaborate castle-like towers. The winning structure, as selected by a panel of gaming bloggers, reportedly took 90 hours to painstakingly build. The final stages of the contest were broadcast on Twitch.tv, a streaming video platform focusing on gaming, and more than 13,000 viewers watched the drama unfold.

Hungry Boys—whose other clients include the World Wildlife Fund, Lenovo, and Garnier—claim that they “were the first in the world to integrate a branded contest into Minecraft,” with this campaign. Source: psfk.com

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 CER – CHAMPS Excellence Review CFF – Cleanliness Friendliness & Food CMS – CHAMPS Management System COB – Chicken on the Bone CREST – Consumer Reports on Eating Share Trends CSTM – Customer Service Team Member DMA – Designated Marketing Area FA (Or F/A) – Franchise Agreement 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)

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NCAC NFAC

– National Council and Advertising Cooperative – National Franchisee Advisory Council (merged with NAC

to become NCAC)

NMS – National Marketing Subcommittee NPC – National Purchasing Cooperative (i.e., KFC NPC) NPS – Net Promoter Score OEC – Operations Excellence Committee PAC – Political Action Committee POP – Point of Purchase POS – Point of Sale QSR – Quick Serve Restaurant RAF – Refer a Friend REC – Restaurant Economics Committee RGM – Restaurant General Manager RMI – Restaurant Margin Improvement ROCC – Restaurant Operations Compliance Check ROI – Return on Investment ROMI – Return on Marketing Investment RRP – Restaurant Ready Process (aka The Model) RSCS – Restaurant Supply Chain Solutions (formerly UFPC) SBRA – Supplier Business Relationship Agreement TCB – Technology Capability Builder (the KFCC support team for Merit installations) TOL – Territory Operations Leader TPWY – Taking People With You TRP – Targeted Rating Point VOC – Voice of the Customer (formerly CBCC) WAR – Weekly Activities Report YUM – Yum! Brands YRI – Yum! Restaurants International w ww. akf c f . c o m

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he AKFCF Government Affairs Committee (GAC) had an extremely successful Convention in Atlanta this year. Not only was the GAC able to raise more than $30,000 for the Washing-

ton, D.C. fly-ins, but they also were able to raise more than $55,000 for the AKFCF Political Action Committee (PAC). There are very important differences between the GAC and the PAC as they are both funded differently and serve different purposes. The GAC is responsible for communicating legislative information to franchisees, as well as communicating franchisee concerns to legislators. The committee hosts annual fly-ins in where franchisees meet with their members of Congress, participate in fundraisers, and host a reception in the Rayburn Building on Capitol Hill. The Rayburn Reception serves more than 1,000 members of Congress and staff each year. The money raised for the GAC through both personal and corporate donations is what funds this outreach effort. The PAC is a subcommittee of the GAC with its own charter and bylaws. It is regulated by the Federal Elections Committee and its only purpose is to contribute funds to congressional members and potential congressional members. We need PAC funds to ensure pro-business candidates are elected to each and every Congress. Without the PAC funds and support, we could end up with members in leadership positions on Capitol Hill who do not share the same concerns and beliefs as the AKFCF. For example, Sen. Kelly Ayotte (R-NH), who has been a fervent supporter of small business and of franchisee rights, will be struggling to hold her Senate seat this year. The AKFCF maxed out their donations to Sen. Ayotte in 2015 to help ensure proper funding for her campaign. The money you donate to the PAC goes directly to the candidates and is used solely for that purpose. The AKFCF GAC would like to thank all those who attended the Convention, donated to the GAC, and made their 2016 PAC contributions! We made great headway, but we still have a long way to go before we reach our goal. If you didnâ&#x20AC;&#x2122;t have a chance to donate during Convention, please reach out to your regional representative for more information or you may also visit AKFCF.com, click the link to the Government Affairs section of the website, scroll down to the bottom of the page, and click the American flag to be transferred to the donation page.

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2016 AKFCF Issue Map Tax Extenders: The tax extenders package that passed at the end of the 114th Congress renewed the top three tax provisions for AKFCF franchisees. These provisions were extended retrospectively for 2015 and prospectively for 2016. • Realistic Restaurant Depreciation • Work Opportunity Tax Credit • Food Donation Tax Credit Additionally, several popular extenders were made permanent, including the R&D tax credit and earned income tax credit, among others. Giving permanency to popular provisions may end the recurring need to extend dozens of tax breaks with expiration dates. This will give Congress fewer reasons to bother continuing to renew the rest and could change how they write tax policy. On the other hand, changing the system could be bad news for the provisions important to the AKFCF, which have not been granted permanency as of yet. In 2017, the AKFCF will need to double down its advocacy efforts to ensure these important provisions continue to be extended or made permanent. Lawmakers could become much

more selective about which extenders will be renewed. We will have to work hard to make sure the existing tax extenders important to franchisees will not be modified or expire. Ethanol: At the end of 2015, the EPA released the final Renewable Volume Obligation for biofuels for years 2014, 2015, and 2016. The final rule fails to address the elevated and volatile food commodity costs caused by the RFS. Four pieces of legislation pending in the House and Senate would potentially reform or repeal the Renewable Fuel Standard (RFS): • S. 577 – The Corn Ethanol Mandate Elimination Act of 2015, introduced by Sen. Pat Toomey (R-PA), with three cosponsors. • S. 1584 – The Renewable Fuel Standard Repeal Act, introduced by Sen. Bill Cassidy (R-LA) • Four cosponsors • H.R. 703 – The Renewable Fuel Standard Elimination Act, introduced by Rep. Bob Goodlatte (R-VA-6) • 81 cosponsors • H.R. 704 – The RFS Reform Act of 2015, introduced by Rep. Bob Goodlatte (R-VA-6) • 58 cosponsors

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. NORTHEAST Ray Aley III Adil “Eddie” Banani Tom Cecconi Keith Cole Joe Farley Frederick Gallant Syed-Talal Kirmani Don Lopes Dale Moulton Alex Rosenblum Larry Starkey James Waters David White

GREAT LAKES Jeanine Bagshaw David Bell Kathy Bouwman Joe Campbell Keith Chambers John Coldwell Brian Denman Alessio DiFranco Anne Goodnight Kirk Gurney Mary Beth Hamilton Lesley Hottinger Teresa Kelly LaDonna Lewis Lynn Mayer Jim Mikula Diana Myers Marvin Payne Dana Rudoni Susan Stuver Scott Vorrath Brian Wheeler

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NORTHWEST James & Sandra Beglin Jeffrey & Debbie Gray Ralph Harman Brett Harris Fred Jackson James Jackson Sam Sibert Todd Stewart

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William Vollenhals Calvin & Janae White SOUTHEAST Bobby Davis Wiley Dean Eric Felker Chris Fowler Joseph Kendall C. Doug Knipp Eric Overcash John Pankratz Larry Peak Vic Peeples Terry Rogers Linda Rosenbalm Gurpreet “P2” Sandhu Leslie Sharp Bill & Bonny Shelton Marcus Shelton Jay & Kelly Shoffner Jack Sims Bill West Richard West Steve West Daniel Yagoda

SOUTHERN CALIFORNIA Israel Diaz Robert Prendiville SOUTHWEST Debra Ashmore Sheila Boespflug Krystal Burge Richard Cahill Rajeev Jain Franklin Nye UPPER MIDWEST Dale Black Robert & Sharon Clawson Peg & Gene Duenow Peter & Holly Helf Michael Kohlman Michael Kulp Terry Moffit Jim Olson (Harman) Doug Smith Justin Stewart Pete & Mary Wasilevich

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In 2016 and beyond, the AKFCF GAC will be focusing on upping the number of cosponsors on these important bills. Congress will have to act, as the EPA’s rule fails to return ethanol blends to normal. The whole mandate is set to expire in 2022. NLRB Joint Employer: Through its recent decision in the Browning-Ferris Industries case, the National Labor Relations Board (NLRB) has completely rewritten the joint employer standard by including “indirect” and “potential” control over its employees. This ruling reverses more than 30 years of legal precedent that has established a clear set of rules for franchisors and franchisees to abide by in businesses. An expanded joint employer standard like that applied in the BFI case would be bad for franchisors and franchisees alike because it could cause franchisors to pull back support and resources for franchisees, reluctant to provide any training or benchmarks for fear that they could be held liable for later employment issues. The NLRB’s case against McDonald’s clearly illustrates that it intends to expansively apply this new set of standards to franchised businesses. To protect franchisees, the Coalition to Save Local Business (CSLB) made great progress this past year promoting the issue on Capitol Hill. However, they were ultimately unsuccessful in attaching the joint employer rider onto the Omnibus Appropriations bill in December. Therefore, we will employ a similar strategy in 2016, but will need AKFCF members to engage with their members of Congress both in the district and on Capitol Hill. Overtime: The Department of Labor’s final overtime regulation is expected no later than July 2016. The final rule is likely to include a new salary threshold of $50,000, plus a form of indexing that will lead to regular increases in the threshold, some larger than others depending upon calculation method. A large coalition of businesses and trade associations has been educating lawmakers about the detrimental effects on small business owners and their employees of this unprecedented change to overtime rules. Much of the educational focus (like with joint employer) has been

with Democrats. The likely strategy going forward will be to secure an appropriations rider delaying implementation, which would push timing of the rule to a new administration. Minimum Wage: Minimum wage is unlikely to move though this Congress. It is a persistent issue in the Northeast and the Northwest regions, and we are starting to see referendums in the Southeast and Southwest. This will continue to be a top, state-level issue for 2016.

If you have any questions or would like additional background on the information above, please reach out to your GAC representative to be connected with the federal team.

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Celebrating Our Heritage & Building Our Future By Kelly Rodenberg and Cory Sekine-Pettite

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The 2016 Annual AKFCF Convention took us on an amazing journey of twists and turns through “Hotlanta.” It was a great week filled with opportunities to learn, to grow, to reconnect, and to just have some plain old fun. Seeing Chris Fowler arrive in Colonel Sanders’ 1979 limo was a perfect example of the heritage of this amazing KFC Brand and the importance of this Association in reclaiming that heritage as we grow into the future. It also gave us a glimpse into Chris’ sense of humor! The limo was a gift from the AKFCF to Colonel Sanders and is now proudly owned by Chris and his family. This Convention was about celebrating that heritage and everything you as franchisees bring to Kentucky Fried Chicken. That’s something we can be joyful about as we connect and work together, no matter what obstacles get in our way! The Georgia Mass Choir made a surprise appearance during Chris’ keynote speech that provided a touch of joyful soul and brought the audience to its feet. The Choir entered the ballroom singing “Reach Out and Touch Somebody’s Hand” and left the room belting “Oh Happy Day.” Talk about heritage, they’ve been raising the roof together for more than 30 years! During the opening general session, we recognized that where we’ve been is as important as identifying where we’re heading. We are moving into the future by going back to the basics. Last year, more than 4,000 KFC managers attended almost 50 regional, “back to the basics” rallies, as we began “Re-Colonelizing” the system. Nearly all restaurants have completed training and are now selling a superior product. We laid the groundwork for getting everyone excited about what we need to do to serve our customers the hottest, the freshest, the best fried chicken they’ve ever had. And that brings us to the Original Recipe that made Kentucky Fried Chicken famous. The original “sticky finger” recipe is our heritage and our future. It is our privilege to continue the recipe developed by Colonel Sanders more than 75 years ago; and it is our goal to be number one in taste within 19 months. The Colonel also is our heritage and our future. The Re-Colonelization project is moving ahead in full force and with great results. This project came to life because AKFCF, KFCC, and NCAC partnered together. Whatever your opinion is on the TV Colonels, the fact remains that Colonel Sanders’ powerful presence as a part of our Brand—past, present and future—cannot be denied. His passion for this business focused on how the food tasted. He was a stickler for quality and come back flavor. We all agree that the bottom line is making sure our food is “Finger Lickin’ Good.” KFCC listened, and they heard us. And now our product tastes better when we cook it right. We all agree that we want to make the Colonel proud. Chris Fowler also spoke on the priority of creating a framework that consistently makes our partnership with KFCC better, regardless of who is in the various leadership roles. In September of 2015, the KFCC leadership team attended the AKFCF board meeting—the first time ever in “peacetime”—and they attended fall regional meetings to have one-on-one conversations. So we all want this. Everyone is committed to building our shared vision of the future. At our convention one year ago, we had an important vote that committed us to building the future of this Brand together. That moment was historic and set the table for a lot to take place. In fact, 99.3 percent of you voted for the Acceleration Agreement. First of all, the fact that almost 100 percent of you voted is amazing. Second, it shows that we as an organization are ready to invest in the future. Yes, we remain true to the important aspects of our heritage, but we absolutely must build the future and we are doing it—NOW. The investment we are making in implementing the new remodel program, installing new pack lines, and moving toward only four operational platforms makes us better able to compete in the next decade and beyond. Add to that investment the time we are taking to make sure our cookers are working right, our cooks are well-trained, and our ingredients are what they need to be, we’ve got our own Original Recipe for the 21st century. As we think more about the heritage, Fowler stressed that the AKFCF is more than just an association that puts on a great Convention—it is an organization that works for you and creates positive change. This Convention has always been a cornerstone of how we build for the future. This is an opportunity to talk with and learn from each other. Sprin Springg 22016 016

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The session on Wednesday, February 3 also included presentations from Jason Marker and his leadership team. They reflected on our 2015 achievements and shared insights and vision surrounding the hottest topics and challenges facing our business today. Details were given on how our Brand positioning is being brought to life across the United States. We then learned how we would continue to drive the success of KFC through our marketing and menu innovation, operations simplification, and new restaurant design to deliver a guest experience that builds Brand loyalty and makes the Colonel proud. We also honored standout individuals with a variety of awards, including the AKFCF President’s Award and the KFCC President’s Award. Great workshops were offered throughout the week. (See pages28 for details) Thursday’s closing session kicked-off with a report from NCAC Vice Chair, Tom Slater. Tom updated us on the Revenue Management System program. NCAC believed restaurant Chris Fowler. level pricing was a critical

NASCAR Driver Greg Biffle and KFCC’s Kevin Hochman.

part of marketing, so working with KFCC, some of the franchisees on the Board tested the program. They learned that the recommendations RMS made would truly help them with pricing and profitability, and suggested the NCAC help fund this program for every restaurant in the system. More than 3,100 restaurants have enrolled, and many are already seeing positive results. Slater also explained the value of NCAC’s new streamlined decision-making and meeting process. Highlights include the following: Smaller, fewer sub-committees, all meetings taking place in Louisville, and most importantly the ability to have a majority of votes on marketing decisions and the accountability that comes with that. Kevin Hochman, KFC Chief Marketing Officer, invited the KFC family to commemorate the iconic KFC Brand with a theater-style celebration that payed homage to the Colonel, an amazing year of industry leading advertising,

Convention Committee Thanks Each year, the AKFCF Convention Committee works diligently to plan and prepare the Association’s annual gathering. In recognition of their hard work and dedication, we’d like to thank them for their efforts:

Joan Bowling immediate past president

Chris Fowler AKFCF President

Kevin Schlutz AKFCF secretary

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Greg Atwell AKFCF 1st vice president

Leslie Sharp Vendor Liaison

Eric Overcash AKFCF 2nd vice president

Zaira Guevara marketing and administrative coordinator for the CARIBLA Franchisee Association

Kris Stage AKFCF meetings director

Keith Cole AKFCF treasurer

Kelly Rodenberg AKFCF executive director

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Georgia Mass Choir

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un-precedented collaboration with our Re-Colonelization efforts and Add Hope Erik Wahl campaign, and two special surprises. The new TV Colonel, Jim Gaffigan, was announced and attendees got an advance viewing of the new commercial that aired during the Super Bowl. NASCAR driver Greg Biffle joined Hochman on stage for a special appearance. Biffle drove the “Nashville Hot” KFC NASCAR at this year’s Daytona 500. The KFC NASCAR was on the Convention floor for all to see. Erik Wahl, internationally recognized graffiti artist and entrepreneur, brought the stage to life and re-defined our definition of “keynote speaker” during the closing session. While painting three portraits on stage, he conveyed the message that we need to push the boundaries of traditional thought patterns to unleash the creative genius that resides in all of us. Re-discovering our creativity will change everything, from how well we do our job, and why we go to work every day to how we find fulfillment at home. His final masterpiece was a portrait of the Colonel that he painted upside down and then revealed to the audience. The Final Night Gala was a Southern-inspired celebration. It was an evening to cherish with friends and family over a good meal, some sweet tea with a kick, and true Southern rock music performed by Lynyrd Skynyrd. And the moment when we heard “Freebird” live was the icing on the cake. Our theme was “Celebrating Our Heritage, Building Our Future.” Let’s remember this: it is our privilege to celebrate our heritage and it is our responsibility to build our future. If we go back to the basics and get our recipe back to the Original, we honor our rich history with renewed pride. If our food tastes like the Colonel intended, our customers won’t be talking about which TV Colonel they like or don’t like. They’ll be too busy eating our delicious chicken because we will be number one in taste. That’s how we make our businesses thrive. That’s how we make our customers and their families happy. That’s how we make the Colonel proud. The Colonel’s limo Thank you all for making the 2016 Convention one to remember.

AKFCF Serves! Community Service Event The AKFCF is proud to provide an opportunity for attendees to give back each year while attending the Convention. This year, franchisees and KFCC representatives volunteered to pack donated food items at the Atlanta Community Food Bank (ACFB). The mission of the ACFB is to fight hunger by engaging, educating, and empowering their community. AKFCF volunteers with Atlanta Community Food Bank

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The Hunger in America 2014 Report showed that 1 in 7.5 people, or an estimated 755,400 people, in metro Atlanta and north Georgia turn to food pantries and meal service programs to feed themselves and their families each year. This includes more than 164,000 children and more than 64,000 seniors. For the ACFB service area, statistics show that 80,600 people are served each week by its programs. On Tuesday, February 2, our regional teams of volunteers inspected, sorted, and packed donated goods with a goal of organizing 20,000 pounds of food. This area of operation is crucial as it ensures that retail, salvage, and food drive donations will be safe and wholesome for distribution to people in need. Well, our over-achieving bunch of volunteers actually more than doubled their goal, sorting 41,000 pounds of goods! Thank you all for your hard work and dedication to this worthy cause, and a special thanks to our Service Chair, Sheri Widder, for organizing this year’s Community Service Event. w ww. akf c f . c o m

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In Recognition of their Service AKFCF President’s Award Presented to Ron Gardner

Ron receiving his award

This year, the President’s Award—the AKFCF’s highest honor—was presented to AKFCF General Counsel, Ron Gardner. Gardner was honored in appreciation for his service to the AKFCF family and for proving himself invaluable to the Association, Chris Fowler said. “You never cease to amaze us with your abundance of knowledge and talents that lead to improvements in all of our lives,” Fowler said of Ron as he took the stage. “You have provided wise counsel and mentorship to so many of us. You are a role model for absolute fairness in your dealings with others. I know you would make the Colonel proud.”

Marcus Shelton Honored with KFCC President’s Award and Colonel’s Legacy Award Marcus (with his family) receives his award

The Colonel’s Legacy Award is presented to a second- or third-generation franchisee, whose leadership and service conveys our strength to succeeding generations. Similarly, the KFCC President’s Award is presented each year to an outstanding franchisee who shows an outstanding commitment to the Brand. A two-time honoree this year, Marcus Shelton is a third-generation franchisee in Virginia and North Carolina. “Like last year with Jim Olson, it was a coincidence we chose the same person, and we decided we both wanted to move forward as this individual is truly deserving of both these awards,” said KFC U.S. President, Jason Marker, regarding Shelton’s recognition this year. “Marcus has worked tirelessly to deliver the best service he can to every single one of his restaurants and to every committee he has participated on,” added AKFCF President Chris Fowler. “He is so proud and passionate about the business and it shows.”

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Hard Way Awards Every year during the Convention, the NCAC presents its Hard Way Award to some of the Brand’s most dedicated supporters who demonstrate their commitment to the Colonel’s values. According to the Colonel, the Hard Way means “the keeping of promises, the deliverance of value in goods, in services and in deeds, with sound merit and good ethics.” This year’s recipients are Dick and Tim West of Laurel, Miss., who developed the idea for the $5 Fill Up; and John Kurnick, chief people officer for KFC U.S. Regarding Dick and Tim West, NCAC Vice Chair Tom Slater said: “They were instrumental in coming up with a way to bundle our core products so that the customer found them to be a value, but still allowed us to make money. In the spirit of partnership, KFCC worked with them to develop and test it, and the system has been enjoying its success for over a year.” And regarding John Kurnick, Slater added: “You’ve heard many of us on the NCAC talk about improved partnership with KFCC, and that is certainly true especially with the corporate leaders on the NCAC Board. But there’s one leader that Jason [Marker] brought on to his team who has had a huge impact on all of us and all of our stores, and most people may not even know his name. But you do know his work and that of his team. …He has a true passion for franchisees and most importantly for our most important leaders, our restaurant teams.”

Hard Way Award winners Dick and Tim West

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PETE Award

Service Awards

This year’s PETE Award winner (People Encouraging Talent & Excellence), presented by KFCC, is Justin Stewart from the Upper Midwest Region. Stewart chairs the AKFCF Education Committee, and he has been a franchisee since 1994. KFCC leaders Brian Goldstein and John Kurnick presented the award to Stewart. The PETE Award is named for KFC’s first franchisee, Pete Harman.

The AKFCF congratulates the following franchisees who have devoted 40-plus years of service to the KFC Family. Read more in our feature, beginning on page 46.

55 Years Joan Christenson Brian Johnson Steve Paris 50 Years William Alford Jr. Charles & Betty Clark William Luehrman Don & Eddie Sheldrake

Justin receiving his PETE Award

45 Years Curtis Burkemper Robert Fulwood Ralph Harman Marvin Payne Bill & Bonny Shelton 40 Years Fred Bauer Dick Cahill Larry Mason Estate of Robert Peck Terry Robinson Lynn Rudoni

Shining Star Awards

This year’s recipients are individuals who once again have given their time and dedication to the entire franchise association. In doing so, they not only reach out to support fellow franchisees, but they also uphold a longstanding tradition as one of the world’s strongest brands. This year’s honorees are: Minton Hester, Mike Kulp, Mary Leonida, Russ May, Ken Rianna, Steve Rudoni, and Vern Wardle. For more on these winners, see the feature article beginning on page 38.

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Lifetime Achievement Awards Two long-serving franchisees were honored at Convention with Lifetime Achievement Awards: Darlene Pfeiffer and Kevin Schlutz. AKFCF created the award to recognize franchisees who have made a significant contribution over an extended period of time to fellow franchisees and to our Association. “As chief executive officer and owner of two KFC restaurants for over forty years, Darlene Pfeiffer’s entrepreneurial spirit is equal only to her commitment to philanthropic causes,” said AKFCF President Chris Fowler. “To this day, she pays homage to the Colonel Harland Sanders both in his way of doing business, based upon the principles of hard work and grassroots ethics, but also having the Colonel’s legendary corporate philanthropic model and personal generosity. Darlene has continued the Colonel’s tradition in both of these respects.”

The Workshops The American Showman Asset Journey—Attendees had two opportunities to attend this workshop where they were given a live look into the KFC ASA journey to date, including real-time updates on build schedules, restaurant design, finance options, and shared learnings from completed pilot markets.

American Showman workshop

Darlene accepting her award

Pfeiffer was the first woman to be president of the AKFCF and also has the unique distinction of being AKFCF president, not once, but twice. Additionally, she was the first franchisee editor of the AKFCF Quarterly and managed the magazine from 1985 to 1995. Regarding Schlutz, Fowler said: “It’s one thing to achieve success in a lifetime; it’s more difficult to sustain it. But the delicate feat is to use it smartly. On any of those standards, Kevin Schlutz is offthe-charts successful.” Schlutz has been serving the AKFCF for more than 20 years. He has the distinction of being the first second-generation president of AKFCF, and he and his father were the first father and son to serve as AKFCF presidents. “When Kevin speaks, people listen, riveted by the man who combines the compassion of a grandfather and the fierceness of a businessman,” Fowler said. “But the most impressive thing is that he has used his influence to help others, both by giving advice and sharing experience and mentoring those just coming into the business.”

Data-Driven Solutions workshop

Data-Driven Solutions Through the RMS Pricing Program— In this workshop, franchisees learned more about Revenue Management Solutions (RMS), the services they provide, and how their analytical approach to pricing decisions can generate more profit for your restaurants.

Kevin accepting his award

Best on Block workshop

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Delivering a Craveable Taste Experience–A Foundation for Success—Delivering a Best on Block experience for every guest begins with building a solid foundation made up of clear and concise standards, well-trained team members, and a compliance program that empowers. It was here that attendees discussed the new and more intuitive People Excellence workshop Standards Library, how to ensure every team member is trained to execute the Standards at a high level, and how to leverage our new Restaurant Operations Compliance Check (ROCC) as we strive for continuous improvement. Delivering Best on Block Operations – Breakthrough Results—Achieving daily operations excellence is critical to driving for breakthrough results in our restaurants. In this workshop, guests were shown how to gain in-depth operational insight by leveraging the robust tools and metrics available, including balanced scorecard, Your KFC Voice, VOC, ROCC, our Social Media coop, and much more. People Excellence—During this program, franchisees learned how to help our teams attract, develop, and engage top talent to deliver world-class operations and our branded service promise. This interactive session built upon our know-how on

Re-Colonelization workshop

Technology workshop

Legal workshop

tools that can transform the employee experience: Hiring Zone, Team Member Selection, AMP, Your KFC Voice, and our fun and impactful culture resources. Building Better Restaurants Through Technology—Technology is a critical component to running great restaurants and meeting the needs of our consumers. In this workshop, attendees were able to build upon their know-how on KFC’s technology strategy and learned how to use innovative products and technologies to drive their business forward. Building Better Restaurants workshop

Legal Update—The legal landscape for all KFC franchisees is ever-changing. As the Brand Turnaround continues to roll-out, franchisees are having to deal with asset upgrade requirements (voluntary and otherwise), the prospect of real consequences for under-performance, Merit, and a whole host of other issues. AKFCF General Counsel Ron Gardner presented his “don’t miss” annual legal update, discussing in clear and easy-to-understand terms where we are, and where we appear to be going. ARL/RGM Success Routines—In this session for ARLs and RGMs, moderators discussed KFC’s must-haves to ensure you are an impactful coach who drives great operations and leads your team to performance excellence. Among the topics covered were time management, bench planning, scheduling, cleanliness, accountability, and calibration of standards to ensure we’re all committed to making KFC a stronger operating Brand. Sprin g 2 016

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AKFCF 2016 Convention Sponsors PLATINUM PLUS

DIAMOND

SILVER

PLATINUM

GOLD

BRONZE Accuserv Bama BioStar Lighting Brother International Corporation Bunge Oils Cafe Valley Bakery Case Farms City National Bank Dart Container Corporation Envysion FSV Payment Systems Genpak Georgia Pacific GH Pastor Griffith Laboratories GTT 30

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Gycor International Henny Penny Corporation Hyginix LLC Idaho Pacific Corp InfoSync Services InterMetro International Paper ITW FEG – Hobart & Traulsen Kraft Heinz Magnesol / Dallas Group Mar Jac Poultry McCormick and Company Mspark, Inc. O.K. Foods, Inc. PAR Paychex, Inc.

Payless ShoeSource – safeTstep Performance Foodservice PlotWatt Prince Castle LLC Procter & Gamble Rapak Revenue Management Solutions, LLC Shamrock Farms Dairy Simmons Foods Small Box Energy Smithfield Taylor Enterprises of KY The Hershey Company TransAct Technologies WestRock Company w ww. akf c f . c o m

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AKFCF Convention Exhibitors 3M Accuserv ACP, Inc. AKFCF Government Affairs Alconox Allen Industries Inc American Security Products Ameritech Facility Services Anchor Packaging ARYZTA AT&T Atlas Sign & Awning Company Auspex Capital AyrKing Corporation Bama Bank of America Merchant Services Barco Uniforms Basic American Foods Bettcher Industries, Inc. BioStar Lighting Brother International Corporation Buccaneer, Inc Bunge Oils BUNN-O-MATIC Cadence Bank Cafe Valley Bakery Capitol Light Case Farms CH Guenther & Son Citizens Bank - Restaurant Finance City National Bank Claxton Poultry Coordinated Financial Resources Cornelius Inc. Craig Specialty Advertising CrewSafe Cummings Resources LLC Custom Seating, Inc. Dart Container Corporation Del Monte Delaget Delfield Dr Pepper DTT 32 32

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Dunbar Armored Duro-Last Roofing, Inc. Ecolab EnviCor Enterprises Envysion Everbrite, LLC Facility Concepts, Inc. FIFO Innovations Flowers Bakeries Franchise Insurance Agency Inc Frontline International Frymaster FSV Payment Systems Genpak Georges Inc. Georgia Pacific GFX Intl GH Pastor Global Cash Card GOJO Industries Inc Golden State Foods Griffith Laboratories GTT Gycor International Henny Penny Corporation HME HotSchedules Hughes Huhtamaki Huntington Bank Hyginix LLC Idaho Pacific Corp InfoSync Services Inova Payroll InterMetro International Paper ITW FEG â&#x20AC;&#x201C; Hobart & Traulsen Kaivac, Inc KFC Development KFC Harvest KFC HR KFC Quality Assurance KFCC Information Technology Kitchen Brains akfccf .fc. coomm wwww. ww. akf

Koch Foods, Inc. Kolpak Kraft Heinz LDI Mfg. Co. Inc. Leavitt Ins Serv of So Ca Lend Lease Magnesol / Dallas Group Manitowoc Ice/Servend Mar Jac Poultry Marcus & Millichap Marlite MBUSA MC Sign Co. McCain Calatin McCormick and Company McLane Middleby Corporation Mspark, Inc. NDA, Inc. NetSpend, A TSYS Company O.K. Foods, Inc. On Display OneDataSource Orkin, LLC Pacific Premier Franchise Capital PAR Parapet Studios LLC Paychex, Inc. Paycor Inc. Payless ShoeSource – safeTstep Peco Foods, Inc PepsiCo Performance Foodservice Pilgrim’s Pinnacle Foods Group LLC PlotWatt Prince Castle LLC Procter & Gamble ProGroup Contracting, a licensee of CertaPro Painters R.F. Technologies, Inc. Rapak Restaurant Technologies, Inc. Revenue Management Solutions, LLC RSCS S. Thomas & Associates SCA Tissue North America Security Source Selecto Inc

Service Management Group Shamrock Farms Dairy Sharp Electronics Corporation Shoes For Crews SIB Fixed Cost Reduction Simmons Foods Small Box Energy Smithfield SPG International, LLC SR Max Slip Resistant Shoe Company Staples Stratovent SYR T&S Brass and Bronze Works talentReef Taylor Enterprises of KY Tech-24 Tetley Harris Food Group The Hershey Company Time Warner Cable Business Class Tolt Solutions Trane TransAct Technologies Tredsafe / Wal-Mart Tyco Integrated Security Tyson Foods, Inc. Unified Brands Uni-Structures, Inc. United Capital Business Lending US Foods Venstar Inc. Ventura Foods LLC Wells Fargo Equipment Finance WestRock Company Winston Industries - Collectramatic

CARIBLA Cavendish Farms ConAgra Foods/Lamb Weston Essential POS/Aeris POS Franke Foodservice Supply NCR Corporation Oracle Hospitality PepsiCo International Sysco International The Coca-Cola Company Spring 016 Sprin g 22016

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Final Night Gala

This year’s Final Night Gala focused on good ol’ down home Southern hospitality, food, family, and music. Justin Stewart and Keith Cole kicked off the entertainment portion of the evening by hosting the auction for two of Erik Wahl’s paintings—the Statue of Liberty and Colonel Sanders—that he painted during his keynote. A total of $32,500 was raised ($6,500 for Lady Liberty and $26,000 for the Colonel) for the GAC and St. Jude’s Children

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Hospital during Justin and Keith’s humorous bidding/ comedy routine. The BIG entertainment for the night was Lynyrd Skynyrd, the godfathers of Southern Rock, who enthralled the packed ballroom crowd with anthem after anthem, including “Free Bird,” “Gimme Three Steps,” and “Sweet Home Alabama.” Lynyrd Skynyrd wasn’t just rocking the ballroom; they were rocking the entire Atlanta Marriott Marquis!

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2016 Atlanta CARIBLA Convention Recap By Zaira Guevara

The 2016 CARIBLA Convention in Atlanta had the participation of 128 attendees. Held in conjunction and prior to the AKFCF Convention since the early 2000’s, the annual CARIBLA Convention brings together all the Latin American & Caribbean KFC family, including franchisees, team members, RSCS, corporate attendees from the YUM LA&C Marketing team, sponsors, and exhibitors. Relevant topics were addressed throughout the Convention program. Guest speaker Mike Robbins spoke about the “The Power of Authenticity.” During his interactive presentation, he inspired and challenged the group on how authenticity impacts trust, productivity, and how it is fundamental to relationships, communication, and success for individuals, teams, and organizations. RSCS presented its annual update for KFC CARIBLA, including the 2015 results and 2016 key initiatives. The RSCS program management, distribution and monitoring, and spend smart (RMI) are 100-percent financed by the CARIBLA franchisee community since early CARIBLA party 2010 with great results. Speaker John Ross from PepsiCo presented the topic Consumer Digital Marketing Strategies, and how the new consumer journey is impacting the businesses and what can be done about it today. John showed how consumer insights and foresight have driven Pepsi’s digital success and how that can be applied to the KFC Latin America & Caribbean markets. The CARIBLA morning session was followed by the afternoon KFC LA&C Regional

Marketing Fund meeting, which focused on the 2016 regional marketing alignment and best practice sharing from the markets. The week also included the CARIBLA booth row exhibits with booths and tabletops from PepsiCo, Cavendish Farms, Conagra Foods/Lamb Weston, Essential POS/DBA Aeris, Franke Foodservice Supply, NCR Corporation, Oracle Hospitality, Sysco International Food Group, Coca-Cola, NCR, Manitowoc, Ecolab, Aviko, and Magnesol/Dallas Group. PepsiCo has been the CARIBLA Convention Diamond Sponsor for the past few years. The company contributes to the overall success of the CARIBLA Convention by providing support to the registration process, sponsoring the welcome gift, as well as the annual CARIBLA Convention Party, which was held at Tongue and Groove in Atlanta. The CARIBLA Convention provides multiple opportunities for franchisees, team members, and vendors to interact. The CARIBLA events are planned to encourage and promote

CARIBLA workshop

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this valuable interaction. Events such as the CARIBLA registration, breakfast, lunch (sponsored by Sysco), Word of Coke Visit (sponsored by Coca-Cola) and the CARIBLA Party (sponsored by PepsiCo) contribute to this objective and are enjoyed by all of the attendees. The annual CARIBLA Convention could not be possible if not for the continued support from our sponsor partners. In 2016, we had sponsorship from Diamond Sponsor PepsiCo, Platinum Sponsor Coca-Cola, Gold Sponsor Sysco, and Bronze Sponsors Aviko, Ecolab, JFP, Magnesol, and Manitowoc. w ww. akf c f . c o m

Photo Finish!

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Shining Stars

2016 Shining Stars Minton Hester

Vern Wardle

Mike Kulp

Steve Rudoni

Mary Leonida Russ May

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AKFCF acknowledges the hard work of this year’s Shining Star recipients. By K.K. Snyder

n this business, little could be more gratifying than being recognized among your peers for hard work and dedication to the KFC franchisee community. That is exactly what the annual Shining Star signifies, and its recipients embody the best of the best in the tradition of servant leadership. These standout franchisees not only excel at operating their own businesses, but also have dedicated themselves to service to the organization as a whole. Since 1998, a select group of franchisees—or individuals who serve the KFC franchisee community—are pinpointed each year by the presiding AKFCF president in recognition of their exemplary diligence and loyalty to the KFC franchisee tradition. Those individuals are acknowledged with the Shining Star award. Here we introduce you to the latest group of Shining Star recipients, each of which brings their own story to the KFC Family table.

Minton Hester Working for his best friend’s father at a Dublin, Ga., Dairy Queen, Minton Hester got to know local KFC franchisee Elbert Mullis during his frequent lunchtime visits. Mullis had no children to pass his franchise to and offered to sell the business to Hester. Twenty-five years later, Hester owns two KFCs in Dublin. His wife, Meta, also works in the business. Hester is past president of the Southeastern KFC Franchisee Association and served for three years on the board of the AKFCF. He lists Mullis and Hugh Collins, the Dairy Queen owner he worked for early on, among his mentors in the food industry. “[Collins] taught me how to run a business, but all the franchisees in the Southeastern Association have helped me at one time or another,” said Hester, who is active in the local Rotary Club and his church. “As a first-generation KFC franchisee, I didn’t have family members to ask for advice, so a strong association was really important to me.” This Shining Star award is Hester’s first KFC recognition, and he was humbled to be acknowledged for his work. “It’s recognition that I’ve maintained the standards of KFC in my stores and have tried to do it the Colonel’s way. We’ve pleased a lot of customers, and we’re doing it the way it should be done.” While Hester remembers being a child and seeing the Colonel during visits to Dublin, the Colonel was gone long before Hester entered the business. And while there was no personal interaction, Hester’s KFCs operate under the same high standards the Colonel insisted upon from all franchisees, he said. With their children grown and practically out of the house, Hester says he plans to remain in the business another 10 to 15 years. Sprin g 2 016 Spring

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Michael Kulp When he became a KFC employee in 2000, Michael Kulp couldn’t foresee what the future with this business had in store for him. He quickly moved from employee to partner in that five-restaurant franchise in Colorado. Sixteen years later, he’s the owner of 267 restaurants spread across 10 states in the Mid-Atlantic and Southeastern United States, and the future still looks bright. During the first nine years in business together, Kulp and his partner grew the company from five restaurants to 64 before he bought out the partner’s equity. Now based in Kansas City, Kan., Kulp has enjoyed tremendous growth as a franchisee, giving back to the organization in return. Among the many roles in which he has served are those for the National Operations Subcommittee, the Restaurant Margin Improvement Steering Committee, the NCAC, the Brand Management Committee, and the National Marketing Subcommittee. Through the years, a number of franchisee leaders have served as mentors to Kulp, including Jim Olson, Pete Waslevich, and Gary Zancanelli. Now it’s important to Kulp that he takes the opportunity to serve as a mentor to others rising up through the organization. “We built a pretty unique culture inside of our business of doing some outside-the-box things from a developmental perspective for our folks,” said Kulp. “Just the ability to continually take people who enter an industry for what they think is just a job and developing it into a career they never saw themselves reaching is probably the biggest passion that I have, and that this industry and this Brand provides us.” In addition to this Shining Star, Kulp also has been the recipient of numerous honors, including the Hard Way Award. “It’s an honor,” said Kulp of this latest award. “I think there’s such a great group of folks that make up this franchise community that to be recognized by them for what we’ve achieved over the past couple of years was certainly an honor and a privilege. I think it’s humbling that your peers would think of you in that context.” Because of the dedication of the franchise community, KFC is a standout in the industry, he continued. “I think what we do is unique. We’re providing a very differentiated experience to the guests in the sense that we’re not a fast meal made fast, we’re a home prepared meal that I think has a very unique place in American history and in today’s world. “It’s not something glued or put together quickly with less-than-quality product. We’re in a category 40

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that’s growing like crazy and have a product people crave. I think for us it’s about getting it right. It’s got a unique place in the marketplace for sure.”

Mary Leonida While in graduate school 22 years ago, Mary Leonida had the opportunity to purchase a KFC franchise in Kansas City, Kan. While she works full time today as a consultant, she continues to love being the franchisee of her Kansas KFC. Leonida says Bill Cutrer is the first franchisee she met, and both he and David Sparks served as mentors to her through the years. She says KFC has been a great experience for her overall. “I think it’s because of the wonderful people I’ve met through the system, people I’ve created great friendships with over the years.” One of those relationships is with Chandra Martin, Leonida’s restaurant manager. While they’ve only worked together for the 16 years since Leonida purchased the KFC there, Martin has been with that particular KFC for 42 years. “It’s been really great to work with her and hear all of her stories. I’m very fortunate,” said Leonida, who replaced the former KFC location with a new KFC/Taco Bell after purchasing the market. Through the years, Leonida has served the KFC community in a number of roles, including past president of the Southwestern Kentucky Fried Chicken Franchisee Association, where she is currently secretary. She also sits on several AKFCF committees, including Leadership, Partnership, and Structure. This award is Leonida’s second Shining Star, having received the first in 2010. “It means a great deal to me because it is a reminder of the wonderful people I’ve met and the genuine friendships I’ve made in the KFC family,” she said, adding that giving back to the KFC community is such a rewarding experience. “AKFCF is an incredible organization overall and has remained so through the years as it’s evolved. It’s one of the strongest franchises in the world, and it’s great to be a part of this.” w ww. akf c f . c o m

Russ May In 1976, at a little KFC without a drive-through window, 14-year-old Russ May worked as a cook in the California restaurant owned by his father, franchisee Skip May. Working his way through both high school and college, May gave his notice to leave the job upon graduating in 1988. Working in real estate at the same time he was finishing college and working for his father, May saw his life going in another direction. But when his father was ready to get out of the business in 1989, he ended up selling the restaurant to May and his brother, Roger, keeping May in the KFC business ever since. Today, the May brothers own two restaurants in Lake Elsinore, Calif. Dedicated to the business, May has served the organization in a number of ways, including participating for about five years in the KFC SoCal Advertising Co-op and a dozen years in the SoCal

Franchisee Association, four of which he spent as treasurer. For the past five years, May has served as a director on the board of the KFC National Purchasing Co-op and on the SoCal Purchasing Committee. May names Ed Thomas as a mentor to him in the business through the years. “He always seems to make the complicated things simple, or seem simple. As he puts it, ‘It’s not that complicated.’” This Shining Star is May’s second, having previously received one in 2009. “It really surprised me that they gave it to me again. In September, at our fall meeting, they started describing this person—what they’ve done for our community, what they’ve done for our region. I’m thinking it could be this person or definitely that person or maybe those people over there.” When his name was called, May was pleasantly surprised. “It’s so humbling when you think about so many people in the Region. It is an honor.” May’s biggest prize also came from KFC, though indirectly. His wife, Pam, was a school teacher who came into the restaurant one day seeking donations. “We ended up dating and then marrying,” he said. This year, May is focused on plans for remodeling both restaurants by the end of the year.

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Ken Rianna As a high school graduate, Ken Rianna headed straight for the U.S. Navy, ready to see the world. Ironically, his first orders sent him right back to Rhode Island at Quonset Point, just 20 minutes from home. Not to be discouraged, he forged ahead. Wanting to buy a new car, he went looking for a second job in his hometown of North Providence, at a brand new business called Kentucky Fried Chicken— where his sister had just been hired. They didn’t need any additional team members at the time, but picking her up from work one night, Rianna was

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asked by franchisee Bob Piacitelli about when he was getting out of the service and if he’d be interested in talking to him about becoming a manager trainee. That was 1968. Ted Lide, also in the military, was Piacitelli’s partner. Rianna worked with the pair for 18 or 20 years, opening several new restaurants for them and running the operation. Rianna also met his wife, Irene, courtesy of KFC, as she was a team member in one of those restaurants. “She was the love of my life,” he said in a recent interview. In 1984, the couple discussed him going out on his own as a franchisee, but Rianna was concerned about being able to afford both that and college tuition for their three children. Attending a KFC Northeast Franchisee Association meeting shortly after that discussion, Rianna met Paul Kocalis, head of franchising at the time. He asked if Kocalis would consider making him a franchisee. With the blessing of the two partners he’d long worked for, Rianna opened his first KFC restaurant in June 1984 in Greenville, R.I. “Over the years, I fell in love with KFC—meeting people, hiring people, getting to know the business from the inside out, getting involved in the lives of our team members,” said Rianna, who today owns seven KFCs in Rhode Island and Connecticut. Rianna has been a member of the Service Council, the Chef ’s Council, is past president of the Northeast Region, ran the Convention Planning Committee for the Northeast, chaired the Distribution Committee for the Northeastern Poultry Committee, and was the Northeast representative to the Purchasing Co-op. He was recognized in 2010 with the distinguished P.E.T.E. Award. “That man was my idol,” said Rianna of Pete Harman. “I always tried to treat people the way he treated people.” Rianna credits his wife and his son, Rob, as being a big part of his success. Sadly, Irene was diagnosed with early onset Alzheimer’s and passed away in 2014 at just 62 years old. Rianna semi-retired at the time of his wife’s diagnosis so he could take care of her, but today remains active in the day-to-day business now overseen by his son. This Shining Star award was particularly meaningful as his son, Rob, made the presentation. “I found it to be a very humbling experience, and w ww. akf c f . c o m

I’m very proud of it. Since my wife passed away, it’s been an emotional roller coaster for me, trying to turn that corner and get my life back together. Thank God I have KFC to keep me busy; it’s been my life.”

Steve Rudoni, Sr. Awarded to Steve Rudoni Sr. posthumously, this Shining Star was bittersweet for the Rudoni family who lost their patriarch in June 2015. The award was accepted last fall on her father’s behalf by Dana Rudoni, one of four children of Steve and his wife, Lynn, and a member of the Great Lakes KFC Franchisee Association. In 1968, Steve Rudoni Sr. went to work for KFC in the William Alford Company, spending eight years under Alford’s leadership. Today, the family owns six KFCs in Michigan, operating a seventh restaurant for owner John Coldwell, who serves as vice president of operations for the Rudoni franchises, where he’s worked for 36 years. “This really is a family business,” says Lynn Rudoni, noting that three of the couple’s four children work in the franchise. Dana is the office manager, Steve Jr. oversees maintenance, and Christie heads up Human Relations. In addition, two grandsons work in maintenance and a granddaughter is in accounts payable. During his four decades in the business, Rudoni Sr. served as chairman on the Operations Excellence Committee and the Ops Sub Committee; was a member of the Calendar and Beverage committees; represented Region 6 on the NCAC; and was president of the Great Lakes Co-op. At the time of his death, he was treasurer of the Lansing/Jackson Co-op, president of the Northern Michigan Co-op, and a member of the Flint/Bay City Co-op. Lynn recalls a visit to Mount Pleasant from the Colonel, during which he stayed with their family and was served Rudoni Sr.’s famous chili. “The Colonel gave him two thumbs up on it,” said Lynn of the special recipe. The family took the Colonel to a Central Michigan University football game where he was driving around the field on a golf cart while enjoying a standing ovation, she said. The Rudonis also have fond memories of attending the Colonel’s birthday parties, missing only one through the years. They had good reason for not making it to that party, however, as their youngest daughter Michelle was born that year on the Colonel’s birthday. “Michelle always says she did her father’s ‘other love’: politics,” says Lynn of her daughter that is not in the KFC business. “His two loves were chicken and politics. He ate chicken all the time, that’s for sure. He was a good guy, and he worked hard. He had a lot of kids that worked with him for a long time. He provided a first place of employment for a lot of people.”

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Rudoni Sr. was known in his community for the 33 years he purchased not only the champion chicken, but also pens of other chickens competing in the local 4-H Fair, telling the 4-H kids who raised the chickens to put the money away for college, she added. In addition to the Shining Star, Steve Rudoni Sr. also was a recipient of the White Glove Award and the Five Star Operating Excellence Award. Additionally, he was recognized this year with a 40-Year Service Award.

Vern Wardle Though thoroughly enjoying retirement in Salt Lake City, Utah since last summer, Vern Wardle spent 49 years as a KFC franchisee, part of the Harman Management organization. As a 16-year-old in 1967, Wardle worked as a dishwasher in Salt Lake City at “the first KFC in the world,” the first restaurant to bear the Kentucky Fried Chicken name. Wardle stayed with the organization and by age 18 was a 40-percent owner of one of the restaurants. “All of Pete’s managers are part owners,” Wardle explained. “That year they sold me some stock. Within a year and a half, I received as many dividends as I paid for the stock and so I became a young believer. It’s such a great incentive, and it was just a great career.” By age 28, Wardle was serving as an area coach, noting that along the way he was even paid while taking management courses, increasing both his education and his bottom line. “The more responsibility I took, the more he gave me,” Wardle said of Harman. Along the way, Wardle married and had six children, five of which worked in the business during high school. One son, Troy Wardle, chose to stay in the KFC business and now serves as regional director over the state of Utah. In addition, Wardle has two grandsons and a granddaughter currently working as team members. Wardle volunteered his time to the organization over the years, serving the Northwest KFC Franchisee 44

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Association in every role, from president to secretary, as well as being the shadow on the NCAC and serving on the finance committee of the AKFCF. Wardle recalls the Colonel visiting Utah every summer for the 24th of July Parade (also known as Pioneer Day in Utah). At age 17, Wardle had a girlfriend named Karen working at another KFC, and she had the privilege of riding with the Colonel on the parade float. “Now that girlfriend is my wife,” he said, adding that she was his partner in the business. He cites Harman Management CEO Jim Olson as a mentor through the years. “He was great at teaching and delegating, and he wanted everybody underneath him to be successful. It was a very rewarding career.” Not a newcomer to recognition, Wardle is a seventime Top Ten winner in his company. He received his first Shining Star award about a decade ago and was given the Floppy Chicken Award by Cheryl Bachelder, former KFCC president, for his assistance with the fresh food campaign, suggesting time tags that show the freshness of the product. “It was something that I had introduced in my own company, and then KFC put it in throughout the whole system. They enhanced it, and it’s still a program they use today.” Wardle says he was humbled by this most recent award, which he received during the Northwest Region’s fall meeting. Though technically already retired, Wardle was encouraged by his boss to attend the final meeting in order to say goodbye to all the franchisees. He was even sent on a free trip to Hawaii for the gathering. “Dang, what a way to say goodbye! I thank everybody, wish them the best, and hope they keep growing KFC.

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FRANCHISEE SERVICE AWARDS By Paul Geref fi

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f longevity is one measure of success, then KFC franchisees stand second to none. In a business where competitors come and go—and ownership changes quickly—many KFC franchisees remain a stable part of their communities for decades. The QSR business is fragmenting into what seems like an endless parade of brands, each promising to be the best at what they do, and offering ever-changing twists on basic menu items, such as burgers, sandwiches, and chicken. However, KFC still stands out as the standard for those who crave great chicken seasoned with the unique blend of herbs and spices. KFC’s core product still offers a unique flavor profile and appeals to a variety of consumers, who keep coming back. KFC franchisees have demonstrated a resilience that few other brands can match and often foster a relationship with their customers that is unique. It is all tied together by the influence and image of Colonel Harland Sanders, who continues to live on, especially through the franchisees that carry on his legacy. Here are some of their stories.

55 Years JOAN CHRISTENSON St. Cloud, Minn. Joan and Vernon Christenson started their KFC franchise in 1961 with hopes and dreams of success, according to daughter Susan Schmidt. Growing up in southern Minnesota, Joan worked on the family farm, styled hair in St. Paul, and worked at an ammunitions plant. Vernon sold Archway cookies, and was bookkeeping for the 3M Company. Never satisfied, they looked for a business opportunity. “Finding a rundown drive-in restaurant in St. Cloud, northwest of the Twin Cities, they borrowed $2,000, took us kids along, of course, and went to work,” Susan says. “The drive-in, called Eddies, became very busy cooking Mom’s Sloppy Joes, steak sandwiches, and fried chicken.” The family would soon learn of another product that would be a perfect fit for the menu at Eddies. “Visiting Dad’s family in Minneapolis we learned about KFC and realized what a great product it would be to sell at the drive-in,” she says. Guided by an existing KFC franchisee, Don DeLaria Sr., and the Colonel himself, KFC was introduced to St. Cloud. “That, of course, was 55 years ago. Over the years, we closed two stores and today my brother Brian and I operate one located in Waite Park, Minnesota,” Susan says.

Service Award Honorees 55 YEARS Joan Christenson Brian Johnson Steve Paris 50 YEARS William Alford Jr. Charles & Betty Clark William Luehrman Don & Eddie Sheldrake 45 YEARS Curtis Burkemper Robert Fulwood Ralph Harman Marvin Payne Bill & Bonny Shelton 40 YEARS Fred Bauer Dick Cahill Larry Mason Estate of Robert Peck Terry Robinson Lynn Rudoni Sprin g 2 016 Spring

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Vernon and Joan with the Colonel.

Vernon passed away in 2011, and Joan suffered a stroke in 2012. “Mom lives at a nursing home and we always talk business during our visits,” Susan says. “She always asks ‘are you busy?’” At 90 years old, she still is interested in her KFC business. The necklace she received this anniversary will remind her of the good times and friends from the franchise family. “Our folks accomplished their hopes and dreams; now we need to carry on that legacy,” Susan says.

BRIAN JOHNSON Noonan, N.D. Brian Johnson and sister Donna Coulter are proud to carry on the tradition of the Johnson family, who have been KFC franchisees since 1961. Parents Don and Evelyn Johnson started the KFC franchise. Tragically, Don passed away in 1979 and the franchise was put in the name of Brian. Last December, Don’s wife, Evelyn, passed away, but the Johnson family continues on with the business. Today, Brian assumes the role as chairman, and Donna acts as president of the company. But getting back to the beginning, Don and Evelyn purchased a drive-in restaurant in 1961 in their native Estevan, Saskatchewan, Canada. They operated the restaurant on weekends with Don’s parents, John and Delilah. It was obvious that the restaurant needed something special and after some research, Don decided on Kentucky Fried Chicken, whose people seemed honest, hardworking, and deserved the chance. Called Dee Jay’s (from Don’s initials), the restaurant was— and remains—a family business. Grandpa John and Brian were generally up at 6 a.m. on the weekends to prepare the food, including the side dishes. “While other kids were watching cartoons, I was working at the KFC,” Brian says. “Those certainly were interesting times. It was the time when fast food was just getting started.” Colonel Sanders made his first visit to Estevan in 1978. “The Colonel, being a real celebrity, was quite the hit for this small town, including parade; radio interview; talks with many customers; and, of course, the anticipated gravy inspection,” Brian says. “It is legendary that no one really passes his gravy inspection, but at least on this visit there was no cussing, throwing, or cane smacking; consider this a win.” 48

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After Don’s passing, the family, led by Evelyn (with all three children: Brian, Cindy, and Donna) ran the company. Dee Jay’s owned and operated KFC restaurants in Saskatchewan, North Dakota, South Dakota, and Nebraska. Other brands added included Long John Silvers, A&W, Taco Bell, and Pizza Hut. A couple of different casual dining concepts also were added and Dee Jay’s current portfolio includes 40 restaurants. Today, the family still operates at its original location in Estevan, and is the longest operating retail business in town. Now, it is time for The Dee Jay’s family to begin a new chapter in their sixth decade of operating restaurants. “It is still about the food and you need to surround yourself with great people,” Brian says. “Serve finger lickin’, good food with friendly people who possess a huge smile in a well maintained, spotlessly clean facility, and ensure everything is correct. Our Dee Jay’s family has had an incredible heritage; we are enjoying our present and very much look forward to the future.”

STEVE PARIS Fayetteville, N.C. Steve Paris came to America in 1956 from his native Greece. His uncle, Nick Fasul, who came from Greece in the early part of the 20th century and settled in Fayetteville, N.C. in 1919, sponsored him. Fasul and Paris opened the first KFC restaurant in North Carolina on Aug. 2, 1961. The original Fayetteville location is still in operation, although the building was rebuilt in 1985 and has been completely remodeled in recent years. In 1967, Ralph M. Potter and Steve Paris formed Paris & Potter Management Corporation, Inc., and continued the development and operation of restaurants in North Carolina. Nick Potter, grandson of Nick Fasul, and a third-generation franchisee, joined the business in 1994. Currently, the company operates 28 restaurants in North and South Carolina.

Steve Paris and Ralph Potter meeting with Colonel Sanders.

“Being part of the Kentucky Fried Chicken franchise family for 55 years has been an honor and a blessing,” Paris says.“It has been a long journey with rewarding experiences and unforgettable memories.” When Paris began his training, the Colonel insisted that Paris stay at his house in Shelbyville, Ky. The Colonel had converted the wooden garage in the back of his home into an office. Paris stayed w ww. akf c f . c o m

for two weeks, riding to the training restaurant in the Colonel’s Cadillac , which featured gold “Kentucky Fried Chicken” lettering on the doors. “It was an interesting experience,” Paris says. “He was fair and compassionate, but insisted the product was always up to standards.” Paris is optimistic about the future. He believes that, with the implementation of the new initiatives, KFC will continue to reach new levels of growth and success.

50 Years CHARLES & BETTY CLARK Muscle Shoals, Ala. Charles Clark first became interested in becoming a KFC franchisee in Huntsville, Ala., where he and his wife, Betty, lived with her parents, J.U. “Woody” Walker and Sarah. At that time, the family frequented a take-out restaurant in Huntsville that

served Kentucky Fried Chicken. They all enjoyed the Colonel’s Original Recipe so much that they decided to explore getting a franchise. The Walkers wanted their daughter closer to home, so the Clarks did Charles Clark and the Colonel. just that by moving to Muscle Shoals, a small town in northwestern Alabama, where Charles opened his first restaurant in 1966. Their first year was a struggle financially as they began their new venture, but dedication and hard work eventually started to pay off. They expanded their business by building more restaurants, along with Clark’s brother-in-law, Robert Walker. They worked as partners up until Robert’s untimely passing in 1977. Currently, the Clark family operates three KFC restaurants. The Clarks met Colonel Sanders on several different occasions, including his visits to KFC conventions. Charles remembers during his fifth year in the business getting to greet the Colonel as he arrived at the local train depot on a promotional excursion. The Colonel promptly reminded Clark to “get back in the kitchen and make that gravy.” Upon learning of the Colonel’s death in 1980, Charles and Betty thought of it as a privilege to be counted in attendance at his funeral.

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Ser vice Awards Over the years, the KFC business has become a family affair for the Clarks. While his sons, Tim and Jeff Clark, attend to daily operations, Charles’ only daughter, Amy Gandy, works in the accounts payable role in their office. The Clarks’ oldest son, Steve, who worked in the KFC business during his teen years, has made his career in computer technology at Athens State University in Athens, Ala. Charles and Betty express their gratitude to all of the KFC Family for the support and encouragement they have received during the past 50 years. But most of all, Charles is appreciative of all those loyal Kentucky Fried Chicken customers with whom he enjoys visiting in his restaurants. “The business is more competitive now and is more of a challenge, but it still feels good to be a franchisee,” he says. “Even as other competitors open, we still have loyal customers who have been coming to us for 30 or 40 years. It has been a blessing to be a part of the KFC business.”

“To differentiate ourselves from our competition, we have been very aggressive in our approach. We are in the people business, making life better for people,” Sheldrake says. Sheldrake adds that the restaurant industry remains the best place for young people to learn the life skills they can use to have a better life. “The restaurant industry, especially fast food like KFC, does a tremendous amount of good, especially for those young people who are less fortunate than us,” Sheldrake says. “It is important that we change the attitude of many legislators that we are not the enemy; we can help millions of young people have a better life if government would only cooperate rather than hinder. By helping youth learn life skills, we can help our communities. We will need many fewer jail cells, have fewer homeless, and have fewer [unwed teenagers] without intact families to help them raise their babies. And we will provide more opportunities in and outside the business.”

DON & EDDIE SHELDRAKE Anaheim, Calif. Eddie Sheldrake describes a dream he has for a better KFC: “We need to live by the partnership agreement, by ABR, and we need to improve our attribute ratings. This helps us to focus on the right things. This will make life better for all franchisees and for the franchisor. And our Government Affairs Committee needs to go on offense rather than defense,” he says. Eddie has the credentials to support his dream. He and his brother Don are KFC franchisees who date their association with the company to 1965, when they opened the first freestanding KFC restaurant in Southern California, in Belmont Shore in Long Beach. It was built for $24,000, had no drive-thru and no dining room. However, along with partner Duke Ritchie, they made it work. In those days, says Eddie, if you had good food, the people would come. Within four years, they were operating eight KFC restaurants. The partners opened several other restaurants in Southern California and currently have 13 KFC units in four counties. In 1968, they developed Polly’s Pies, a family dining concept that now includes 15 locations throughout Southern California. Sheldrake, a former basketEddie Sheldrake ball star at UCLA who played under legendary coach John Wooden, was able to duplicate his success on the basketball court in the business world. Sheldrake attributes his business success to a great partnership with his very smart brother, Don, and also working with a lot of great people, who are his team members and his customers. 50

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45 Years ROBERT FULWOOD Springfield, Tenn. Bob Fulwood had a chance to live the American dream—not once, but twice. He was working in 1968 at the successful brokerage house of J.C. Bradford & Co., the first Nashville firm to buy a seat on the New York Stock Exchange. He was on his way to fulfilling the American dream. One day, while at the local barbershop, his barber (whose brother worked within KFC) kept telling him about an exciting new restauRobert Fulwood rant concept. KFC was headquartered in Nashville at the time. “I had a good job already, but my barber kept bugging me to check it out,” Fulwood says. “He kept after me, and in six months I went back to the office to check out KFC. The more I researched it and dug into it, I finally realized it was really a great success story.” Fulwood interviewed for a job as a field representative before he had ever visited a KFC or eaten their chicken. He was hired as one of 16 field reps, covering parts of Georgia, Alabama, and Florida. He often helped restaurants get started, he and his team working in the back of the house while Colonel Sanders worked out front, meeting and greeting future customers. After about a year, Fulwood realized he wanted to become a franchisee so he applied for a KFC in Springfield, Tenn. It opened w ww. akf c f . c o m

on July 7, 1971, and he and his wife, Faye, ran the restaurant together. It was shortly after the birth of their daughter, Christi, and the couple would often take her to work with them, sometimes keeping her behind the counter as Faye took customers’ orders. “It was a team effort and we did it all,” Fulwood says. “It was a lot of fun to run your own business and be your own boss. It was the American dream.” All over again. The key to success is long-term employees, says Fulwood. Fulwood’s managers have been with him for almost the entire 45 years, including one who started on the second day they opened their first restaurant. He also has five assistant managers and about eight team members who have been there 20 years or longer. One of the most rewarding aspects of the job, says Fulwood, is the potential to have a positive impact on the lives of the employees. This includes influencing the lives of young people who are working their first job, and long-term employees who have made a successful living for themselves and their families. “You are no better than your employees,” he says. “When the customer comes in, they don’t know who the owner is. They just know the employees. We treat them like family and if they are loyal to us, we are loyal to them.” Fulwood is a past president of both the Southeastern KFC Franchisee Association and the AKFCF. He has thoroughly enjoyed his years with KFC and living the American dream along with his employees. “I’d do it all over again,” he says. “I’ve been very fortunate.”

Fairbanks, Alaska. Then they built two others and closed the original location. One is a KFC and the other is a KFC/A&W co-brand, which he ran with Saundra. Ralph was inspired in his KFC endeavors by his uncle, Pete Harman. Ralph says he learned by watching the way Pete ran his operation. “He was a real people person,” Ralph says. “He has always been an inspiration to me.” Ralph says the most important thing he has learned is to take care of his customers and his team members. By doing

so, he says, that will keep his customers coming back. Ralph says it is a constant challenge to keep the business successful in today’s competitive climate. “The business has its ups and downs, but people have made the difference,” he says. For example, Marvin Jorgensen has been with Ralph for 35 years. Managers Felicia Wallace and Ted Ellis have been with him about 13 years and 10 years, respectively. Ralph adds that he is happy that some of his managers in the Idaho operations

RALPH HARMAN Fairbanks, Alaska Ralph Harman started his KFC career along with his father, Griffith Harman, in 1964. Ralph worked for his father at a KFC in Idaho Falls, Idaho. In 1970, he bought his father out and became a franchisee. Along with his brother Jay and wife Saundra, they built five more restaurants over several decades. After Jay retired in 1998, they sold their restaurants and Ralph and Saundra bought one restaurant in Sprin g 2 016

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Ser vice Awards went on in KFC as area supervisors for other franchisees. In addition, some team members also have moved up as managers. Ralph was impressed with Colonel Sanders, whom he met four or five times. The Colonel also visited one of his restaurants in 1976. “He would come in and meet and greet with customers,” Ralph says. “He was very hard-working and detail oriented. He was very impressive and also a very good salesman.” Ralph has served on a number of AKFCF committees and won several awards during his career, including the high sales award, the Heart Award, and the White Glove award. He adds that he wants to thank all the franchisees and KFCC, as well as his family, who have helped make these 45 years possible.

Bonny grew up in Savannah, Ga., and was working as a legal secretary when her parents, Layton and Evelyn Bacon, moved to Danville, Va. in 1964 to open their first Kentucky Fried Chicken restaurant. One year later, as they planned for a second restaurant in Martinsville, Bonny was asked to come and manage that location. This is where she met Bill. Bill and Bonny married in December 1966. A few months later, they took over the management of the Martinsville location. In 1968, the couple took a year away from KFC. In 1969, another location was being planned in Roxboro, N.C., and the couple was asked to manage that restaurant with the goal of becoming franchisees. They became franchisees in 1971, and in 1972 bought an additional restaurant.

MARVIN S. PAYNE Oak Hill, Ohio Marvin Payne became interested in running a restaurant while he was working as a first mate on cargo ships on the Great Lakes. He became aware of the franchising opportunity presented by KFC and the Colonel’s marketing strategy, and thought it would be something he would enjoy. Piloting cargo ships across the Great Lakes is not for the faint of heart, says Payne, but sometimes neither is running a restaurant. Together with friend Bob Bagshaw, the pair traveled to Louisville to talk with the Colonel himself about two available franchises in Ohio. They were subsequently approved for restaurants in Jackson and Hillsboro, Ohio. During his time as a busiMarvin Payne and the Colonel. nessman, Payne found that the KFC product was a great icebreaker. “I found that if I took a bucket of chicken with me when visiting, I usually got invited back,” he says. “It’s always been a warm feeling.” At one time Payne had four restaurants, but now operates a single location. “It’s been fun and the time goes fast,” he says. “The one I have left keeps me active. I want to see the business keep going and I am not sure I want to turn it over, but I guess I will, eventually.” Payne especially enjoys the friendship and camaraderie he has built up with both the restaurant staff and the customers. That is probably what he would miss most if he retires. For now, he enjoys continuing to work. “KFC is still a good place to be,” Payne says.

BILL & BONNY SHELTON Danville, Va. Bill Shelton grew up in Martinsville/Collinsville, Va. and is a graduate of Virginia Tech. He served three years in the U.S. Army and was working as an assistant building project engineer at Sale Knitting when he met Bonny. 52

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Bill and Bonny Shelton with Colonel Sanders.

In 1974, Bill joined Bacon Enterprises as the director of operations over eight Bacon Enterprises restaurants, as well as the two KFCs that he and Bonny already operated. Bonny was already working in the Bacon Office doing payroll, accounts payable, and keeping general ledger. In 1976, after her parents divorced, the couple bought out her father’s part of Bacon, partnering with her mother. In 1983, they expanded by two more restaurants, bringing the total of Bacon Enterprises to 12, including the two previously owned. Gradually, their children began joining the business, first working in restaurants and then moving into Restaurant Support. Bonny’s mother passed away in 1997, and after five years, Bill and Bonny bought the remaining interest in Bacon Enterprises. Children Marcus, Debbie, and Jennifer bought their own KFC location in 1997, becoming franchisees. In 2003, Marcus became partners with Bill and Bonny in Bacon Enterprises. Marcus and Jennifer bought yet another store in 2014. “We believe in and strived to stay true to the standards of Colonel Harland Sanders, and strive to serve his customers with his quality products with fast, friendly service in a clean and safe environment,” say the Sheltons. “We value our team from ARLs to the newest customer service and food preparation team members.” w ww. akf c f . c o m

40 Years FRED BAUER Ludlow Falls, Ohio Fred Bauer started his restaurant career in 1969 at the age of 18 as a cook at a KFC restaurant in his hometown of Cincinnati. He continued to work as he attended college as a full-time student and progressed to assistant manager, then manager, and subsequently area manager of 13 restaurants. In the mid-1970â&#x20AC;&#x2122;s Bauer was contacted by Arkansas-based KFC franchisee Wallace Fowler, who was acquiring five restaurants in the Joplin, Mo., area. It was during that time that he became a KFC franchisee. He remained involved, operating those restaurants until 1979 when he moved to Jonesboro, Ark., to work for Fowler Foods, where he became senior VP and oversaw 92 restaurants across six states. In 1984, Bauer moved back to Ohio and bought five restaurants in the area with the help and guidance of Wallace Fowler.

The first three were in Troy, Piqua, and Urbana. He subsequently added two more in Greenville and Celina, Ohio. Bauer took an active role as a franchisee, joining the Great Lakes KFC Franchisee Association in 1984 and eventually serving as president. He served two terms on the NFAC, and in the final year was chairman. He was part of the transition team combining the NFAC and NAC. He also is past president of the AKFCF (1998-99) and served two terms on the OEC. Currently, he is serving his second term as a director of the KFC Purchasing Co-op.

DICK CAHILL Broken Arrow, Okla. Dick Cahill picked up his business expertise in the hospitality industry. A graduate of Oklahoma State, Cahill went to work for the Marriott hotel chain in Washington, D.C., and Dallas. Eventually, he took a job selling chicken for Gold Kist then went to work for Henny Penny, Inc. Each of these jobs helped prepare him for his entry into the KFC business. Cahill met many people in those endeavors, and Don Edmondson and Wallace Fowler were among them. They decided to buy five KFC restaurants in Oklahoma and asked Cahill to join them in the venture. At the time, Cahill also was a captain in the Army Reserve, but he decided to be a partner and move to Tulsa, Okla. The business soon grew from five to 10

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Ser vice Awards restaurants. Some were sold in 1985, but Cahill bought two more KFCs. The Fowler organization grew to 93 restaurants in six states and Cahill was VP of operations when it was sold. “It proved to be very successful,” he says. Cahill also served 11 years on the NCAC and was AKFCF president in 1994-95. Today, Cahill has one KFC and four Taco Bell restaurants. “I love the business and the relationships formed over the years,” he says. “The key is the people that you hire.” Cahill says that keeping the concept while remaining true to the original product remains a challenge. “I’m passionate about our business; we just need to keep doing it right,” he says.

ESTATE OF ROBERT PECK, SR. Edmond, Okla. Making the franchisee association strong was the work of many people, but very few have contributed as much to the strength and success of the AKFCF as Robert “Bob” Peck. Bob applied for his first Kentucky Fried Chicken franchise in 1975. Back then, the process included interviews with people chosen by the franchisor, and Bob interviewed with the Colonel himself. He opened his first KFC restaurant during the Bicentennial year on April 14, 1976, in Anadarko, Okla., and eventually grew his business to 16 restaurants. Almost immediately, he became involved on behalf of his fellow franchisees. During the 1980’s Bob served as president of

Peck’s family accepting his Lifetime Achievement Award last year at Convention.

the Southwest KFC Franchisee Assoc., chair of the Purchasing Coop, president of the AKFCF from 1989-1990, and chairman of the contract negotiation committee from 1989-1997. The year that Bob served as AKFCF president was a challenging one because it was in that year that the class action lawsuit was filed (resulting in the eventual 1976-5P contract). Today, Robert’s son, Bobby, continues the family business. And because of the service of people such as Robert Peck and the other Service Award honorees, the AKFCF remains today a strong and vibrant franchisee association. 54

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M a n a g e m e n t

The 9 Mis Foodser F

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sion-Critical Issues vice Operators Will ace in 2016

(and what to do about them)

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he restaurant industry is like an escalator; you can move up or you can move down. But if you’re standing still, you’re walking backwards. Now is the time to jump on the key issues we’re likely to be facing in the next 12 months. Here’s my list of the nine mission-critical issues you should be focusing on now to insure a successful 2016: Rising wages. The combination of government mandates and union protests have all but guaranteed that this issue will be prominent in 2016 and beyond. And simply raising menu prices unilaterally is not the right response. Take a close look at all your prime cost line items and transactions to assess where strategic price increases make sense. This means finding new ways to improve purchasing, scheduling, productivity, and throughput so that the overall cost of meal production is lower. Maybe 2016 is time to re-invest in some menu merchandising training for your Managers and Customer Service Team Members too? Staffing and turnover. A shrinking labor pool is a reality in many markets, and if fewer qualified people are applying for open kitchen and front-of-the-house positions, then your twin 2016 HR priorities are clear: employee development and employee retention. In effect, we have to become experts at grooming a “farm team” of internal performers and treating them with dignity, care, and respect to prevent voluntarily migration to a competitor’s employ. Remember that labor is not your primary controllable expense—turnover is. Do the math: If you employ 40 people and your annual turnover rate is 50 percent, you’re churning 20 people per year, which dings you $40,000 in replacement costs ($2,000 per employee) according to the Bureau of Labor Standards. Assuming a 10-percent pre-tax profit, this means you must generate $400,000 in gross sales to pay for your annual 50-percent turnover costs. A 25-percent reduction in turnover saves $200K in sales and improves service, teamwork, and productivity. Training and development. If you want to build a stronger culture and climate, hold every manager responsible for the culture and team that he or she builds. Strong team cultures are synonymous with strong team development. Assess talent and training gaps quarterly and re-design succession planning to be developmentally oriented (talent) as opposed to simply replacement-oriented (tenure). 2016 is the year to re-assess how you train and

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orient new team members. Question every process. Why do you do it that way? Who does it better? Unrelenting data. Instead of managers chasing information, technology can now send information directly to managers. Lots of it. But filters are needed to control the volume, frequency, and relevance of all that data so our managers are not drowning in information and starving for knowledge. The great myth of our time is that technology is communication. It is not. Identify data most relevant for planning purposes and data that applies better to shift leadership so that managers can access need - to - know versus nice - to know data. Don’t obstruct the ability of your unit-level managers and above-restaurant managers to serve employees and guests with fire-hosed data streams. We still manage with people and not through information. The end of the casual customer. The dining public has shown more interest in the restaurant business in the last 18 months than they have in the last 18 years. Guests have expectations of foodservice operators today that far exceed simply serving hot food hot and cold food cold. For instance, make certain you’re aligned to how your guests use technology and prefer to stay connected with your brand. And for goodness sake, get the fundamentals down first: Be brilliant at the basics, sharpen the saw of service, and heighten hospitality in 2016. The mindful customer is the enemy of the thoughtless business. Nothing costs as much as caring. Except maybe not caring. Nobody wants to be a regular at a place that doesn’t make them feel special. Always be marketing. And obsess about the next customer, too. Technology. Stay current on tech that moves your business forward and keeps your data safe. Make technology a perpetual line item on every manager meeting agenda. Continuous improvement. Trace recent improvements in your systems, processes, procedures or people back to both the major decisions you made and the key contributors who drove those decisions’ success. This is called “network charting” in Silicon Valley and “after action reviews” in the U.S. Military. This process creates a success roadmap-in-reverse and identifies the innovative people and scalable behaviors that can drive future success as well. w ww. akf c f . c o m

Strategic clarity and relentless repeatability. Selling the team on your 2016 objectives to obtain their buy-in is the key to making measurable progress. So answer the following questions: “Does everyone on our team know and understand our goals for 2016? Do they know and understand their role in achieving those goals?” While it’s impossible to align all the uncertainties of the future into a set of certainties, these nine mission-critical issues are a smart place to start. No one can predict the future. But together, great teams can create it.

Jim Sullivan is an operations consultant and keynote speaker at leadership conferences worldwide. Companies using his products & services include Walt Disney, KFC, Starbucks, Panera Bread, Applebee’s, Marriott, Coca-Cola and American Express. The 3rd Edition of his best-selling book Fundamentals has just been published. Get his free articles, apps, videos, and e-newsletters at Sullivision.com. You can follow Jim on Twitter@Sullivision

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OEC Structural Changes 6

By Bryan Robinson, Operations Excellence Committee Chair

Hello, AKFCF! As many of you are aware, during Convention there was some discussion around changes to the Operations Excellence Committee (OEC). I’d like to provide an update to that discussion. With the passage of the Acceleration Agreement, the NCAC sub-committee process has become even more important to the franchisee system. By restructuring the Operations Sub-Committee (Ops Sub) and Marketing Sub-Committee, we have improved the efficiency and effectiveness of both. However, the one sub-committee that was left out of the initial restructuring process, as part of the Acceleration Agreement, was the OEC. To that end, the time has come to now integrate the OEC into the NCAC meeting week to gain some much needed efficiency, effectiveness, and—most importantly—influence. Before Convention, NCAC Vice Chair Tom Slater set up a task force to look at how we could better utilize the OEC as part of the new NCAC process. The participants included: Mike Kulp, because of his role in the Acceleration Agreement, as well as his being chair of the Ops Sub; Shawn Brady, as a past chair of the OEC and a long-time representative from the Northwest Region; Jon Stewart, who is scheduled to serve as the chair of the OEC starting in July; Marcus Shelton, as a past chair of the OEC, as well as a current member of the Ops Sub; John Pankratz, who serves as the NCAC representative on the OEC; and myself, as the current chair of the OEC. A primary objective of this task force was to reconnect the OEC with the NCAC 60

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These are REAL changes that will make the OEC a more IMPACTFUL and

INFLUENTIAL committee than we’ve seen in a number of YEARS.

and clearly define its purview. Over the years, the OEC has become more detached from the NCAC, sometimes resulting in duplication of work between the OEC and the Ops Sub. So, as part of the task force recommendation, we laid out specific job accountabilities not just for OEC, but for Ops Sub as well. Under the new plan, the Ops Sub will be responsible for working with KFCC on operations development, including product innovation and improvement, operations processes, management processed, operations simplification, equipment, and others. The OEC will be responsible for working with KFCC on training of everything that impacts our restaurants, including new products, technology, learning zone, and other initiatives. The OEC will be responsible for providing input—and more importantly influence—on measurement tools such as: ROCC, VOC, brand standards, recognition, and communication. Also as part of the reconnection to the NCAC, the OEC will have access to the same brand presentations for the KFCC

leadership team. They will get to taste all the new products in development, and provide feedback on them. The chair of the OEC also will be included in NCAC franchisee-only closed sessions so that the OEC will have access to all discussions involving all sub-committees. These are real changes that will make the OEC a more impactful and influential committee than we’ve seen in a number of years, and will enable it to be just as influential as the Ops Sub and the Marketing Sub-Committee. One of the final changes to the OEC process is how the chair and committee members are chosen. To align with the other major NCAC sub-committees, this new structure will feature eight franchisees from around the system; the vice chair of the NCAC will appoint them. They will be chosen based on a number of criteria to include a demonstrated passion for operations excellence, influence with KFCC leadership, and a proven strength in operations subject matter, to name just a few. As a part of this selection process, the NCAC also will be implementing a new, electronic nomination and information gathering system to assist in selecting the best possible candidates. This new process not only will be used for the OEC, but also for the Ops Sub and Marketing Sub-Committee as well. I look forward to—and embrace— these changes to our NCAC process. And as always, I’d like to extend my heartfelt appreciation and gratitude to all OEC members, both past and present, for your commitment and passion to improve our great Brand! w ww. akf c f . c o m

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Celebrating the 2015 CARIBLA Best of the Best 6

By Zaira Guevara

Last November at the Annual Awards Ceremony in Miami, the KFC CARIBLA Franchisees were recognized for their 2015 accomplishments in helping to build an iconic brand in the Latin America and the Caribbean region. The following are the recipients of the KFC 2015 awards presented by YUM LA&C: KFC MEXICO: Step change asset growth award—For opening 12 new restaurants in 2015 and reaching a

KFC restaurant count of 312 in the market. KFC PERU: Best Redevelopment Award—For its commitment to the redevelopment process with a total remodel count of more than 21 restaurants in 2015. KFC DOMINICAN REPUBLIC: Best growth in sales and transactions (for markets with less than 15 Restaurants)—For achieving same-store sales (SSS) growth of 134 percent and same-store transaction

(SST) growth of 128 percent in 2015, and demonstrating an unlimited passion and absolute determination to reconnect the Brand with the customer by strengthening their value proposition and an impeccable discipline in executing their local windows. KFC JAMAICA: Best growth in sales and transactions (for markets with more than 15 Restaurants)— For achieving SSS growth of 119 percent and SST of 111 percent in 2015, and for its commitment to driving and sustaining value throughout the year. KFC JAMAICA: Product Innovation Award—For their new product in the sandwich category, “The Cruncher.” The Cruncher launch was

(Above) DOM REP sales. Marlon Masis-GM, Margarita Herdocia-franchisee, and Ivan Hernandez-OPS (first three from left to right) from KFC Dominican Republic, pose after receiving the award for Best Growth in Sales and Transactions for markets with less than 15 restaurants. (Right) Quality Peru. Johanna Inti-GM and Juan Carlos Sanchez-OPS manager (second and third from right to left) accepted the Commitment to Quality Award presented to KFC Peru for their quality standards and food safety compliance.

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(Above) OPS PR. Gino Casciani, COO KFC LA&C (first left to right) and Javier Benito GM KFC LA&C (first right to left), presented the World Class Ops Awards for markets with more than 15 restaurants to KFC Puerto Rico. Jose Ribas, KFC Puerto Rico CEO, and Humberto Rovira, president & COO, accepted the award (second and third from left to right). (Below) Market of the Year. Mark Myers, KFC Jamaica franchisee (left), received the KFC Market of the Year Award from Javier Benito, GM KFC LA&C.

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highly successful and a big win with consumers. KFC PUERTO RICO: World Class Ops Awards (for markets with more than 15 Restaurants)— For their high operating standards and the highest levels of accountability. KFC Puerto Rico has the highest GES-Customer Satisfaction Score in Latin America and the Caribbean, and tenth highest score in the world. KFC HONDURAS: World Class Ops (for markets with less than 15 Restaurants)—For achieving remarkable progress in driving Ops improvement in 2015. This market has an average CER score of 92 percent, one of the highest in the region, and a GES OSAT score of more than 65 percent. KFC PERU: Commitment to Quality Award—For the commitment to the highest quality standards and food safety compliance. This market has been successful in getting all of their suppliers to pass the Yum Audits in 2015. KFC Virgencita-Puerto Rico: Restaurant of the Year Award— The 2015 Restaurant of the Year Award presented to KFC Virgencita in Puerto Rico is a reflection of its RGM’s leadership in this market, and the restaurant’s outstanding performance including sales, transactions, CER, FSCC, and GES scores. KFC JAMAICA: Market Of The Year—For successfully overcoming the macro and competitive challenges of the market. For growing market share and SSS, driving accessibility through value, and driving meaningful product innovation. KFC Jamaica had the highest Weekly Per Store Average Transactions in the Region in 2015; and 24 consecutive periods of SSS growth, the last sixteen periods in double digit. Congratulations to the 2015 KFC Latin America & Caribbean Award recipients! The KFC CARIBLA Franchisees operate in more than 40 markets with more than 1,000 KFC restaurants. w ww. akf c f . c o m

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R S C S

M e m b e r

P ro g ra m s

What Would You Do With $15,000? 6

By Lainie Yarmuth

Earlier this year, we all dreamed about what we would do with $1 billion as the Powerball Jackpot neared record levels. At a recent meeting, one of our board members posed the question to attendees: “What would you do with $15,000? If you saved $15,000 on the waste program, would you then buy the Cintas service for restroom cleaning so your employees didn’t have to do the job, or RTI’s oil management solution so your Managers did not have to move waste oil?” The potential savings of $15,000 for a threestore operator is real. Just last week, an operator signed up for the RSCS waste program and without changing his provider or service levels saved $5,000 per restaurant annually! Our board member also mentioned “RSCS Member Programs is not selling anything. Member Programs provides programs/savings for the system.” Member Programs works for you by negotiating nonmandated programs with suppliers for great discounts and agreement

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The SAVINGS of $15,000 for a THREE-STORE operator is REAL.

terms that are favorable to operators. We save the system millions of dollars, but we could save operators even more! To get a pulse on the system’s perception of our programs, RSCS Member Programs conducted a survey late last year to get input about our programs and their value. Some of the key results: We received a 3.6 out of 5 for “How valuable are the Member Programs offerings?”; email is the best method to communicate with Operators; 35 percent of the respondents said they don’t know which programs to use, or

that they don’t have time to review all the offerings. From the results of the survey, our 2016 focus will be to ensure we are showing the value Member Programs brings to the system. We plan to show value in at least three ways: • Operator Savings Reports • Simple Sign Up; and, • Providing bullets in the Digital Directory that highlight key contract negotiation points for operators. SHOW ME THE MONEY! By the time you are reading this article, you received your Operator Savings Report. The average annual restaurant savings for a KFC location using just five of our programs is $3,205! The Operator Savings Report will detail individual operator savings and which programs each operator is leveraging. For example, a KFC operator using three programs is saving $218,115 on waste, $193,555 in UPS, and $6,352 with Staples for a recurring total of $418,022

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annually! The detailed operator information will allow the Member Programs team to target operators who are not saving for specific programs and let them know what a similar size operator is saving in each program. Let us know your thoughts on this new tool! SIMPLE SIGN UP! We hear from operators all the time that “It’s too complex,” “What is Member Programs?” “What do I need to do to save?” While the Digital Directory has saving and program information, is available 24/7, and has quick links to email suppliers, there still is a perception it is too difficult to sign up for the programs. We designed a new tool that allows operators to quickly click the programs they would like more information about and a supplier will contact you about the solution, if applicable. It’s simple, easy, and gets the process started so you can save money year after year! Find this new tool on the home page of the Digital Directory at www.rscs.com/memberprograms. GREAT TERMS AND CONDITIONS IN LEGAL AGREEMENTS! Did you know that RSCS negotiates legal agreements with your suppliers (if applicable)? We spend legal dollars to vet the agreements for operators. We work very hard to be sure operators have reasonable out clauses in every agreement, that suppliers take responsibility for their actions and that you are not left holding the bill for their negligence, and we work toward the best pricing possible for business we cannot promise since the programs are not mandated. We work for you and we hope you take advantage of it! Hopefully, this article brings you a better understanding of Member Programs and how you can start saving. All of the programs mentioned and others can be found in our Digital Directory at www.rscs. com/memberprograms. We always welcome your feedback and look forward to helping you Grow Your Savings even more in 2016! Sprin g 2 016

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N.E. Regional Short

Single Restaurant Operator 6

By CJ Waters

I see the two BIGGEST challenges in RUNNING my restaurant while

SERVING the AKFCF Family are in OPERATIONS and FINANCES. Although they call me a single-store owner/operator, it is far from a single man’s effort. We all know we can’t do it ourselves. Owning one restaurant and serving as regional president makes this obvious. DELEGATION IS THE KEY TO BOTH SUCCESS AND SANITY. Before accepting the nomination for the Northeast Board, I went to my team (and wife, Charlotte) and told them this is not only more work for me, but more for all of us. Without hesitation, they gave me their blessing. So I would first like to thank my team for their support during my tenure. I see the two biggest challenges in running my restaurant while serving the AKFCF Family as operations and finances. A strong husband and wife team works well for us. I handle most of the operations side of the business and Charlotte handles the financial side. I cannot say enough about the love of my life. She is the backbone of not only the operations, but of my whole life. Without her, none of this could be possible. Thank you Charlotte! Operationally, (my end of the business) running a single restaurant and trying to save money makes me a jackof-all-trades, and a master of none, as the saying goes. I am an RGM, ARL, CMO, CEO…facility maintenance. Then throw regional president into the mix and it presents a multitude of challenges. Any time you are out of your restaurant, it affects your operation. When you only have one restaurant, the impact is huge. Between the conference calls, board meetings, planning meetings, 68

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conventions, fly-ins, and summits, time marches on. But with a great team, so does your business. Not only do you need a great team at the restaurant, but you also need a great Executive Committee—I have the best. Our team puts on the best conventions, and we do a fantastic job training, motivating, and rewarding our RGMS each spring. Many of you can attest to this as past participants. Thank you Executive Committee. With fiscal responsibly being my wife’s end of the business, that too is a BIG challenge. Owning a restaurant in New Jersey with a PRA just north of $1 million is a struggle. Combine that with one of the most business unfriendly states in the country makes it twice as hard. The greatest burden, you can’t divide company bills through multiple restaurants. It all comes from

one. A bad winter or a strong hurricane can devastate a single restaurant. These kinds of worries are what keep us up at night. They say you shouldn’t keep all your eggs in one basket, but at least we have a basket and they are OUR eggs. It has been a tough few years serving on the Northeast Executive Committee and being a board member for the AKFCF, plus being a single-store operator. But I have been rewarded with valuable life experiences. I will always treasure these. As I write this, I remember the friends and colleagues I have met along the way. They are not just business acquaintances, but lifelong friends I can call on for advice the rest of my life. My blood brothers. Sure it was a tough road but you know, if I had the chance to do it all over again, I wouldn’t change a thing. Thank you all; it has been a great honor to serve you. w ww. akf c f . c o m

Executive Director Update

Every Hour Counts 6

By Kelly Rodenberg

Ads Manager app, you can pause or resume campaigns, edit budgets and schedules, view insights, and respond to alerts. In addition, you can track ad performance, create ads and edit existing ones, and receive push notifications (to alert you when ads or budgets are expiring and how they’re performing). How many times have you dreamed there were more hours in the day, so you could do all you wanted—and still feel ahead of the game? I am writing this column on February 29; it is due on March 1. This is the year I was able to view February 29 as that precious dosage of bonus time. It was not just extra hours; it was an extra day. In my never-ending quest to get more done in less time, I considered this leap year a generous gift! Whether you lead your own business or work for someone else’s, there are countless ways to take advantage of an extra day. For most of us, we strive to be the most productive in the first 90 days of the year. And I am not talking about diet and exercise, as that is a whole other type of work I try to avoid. This is the time when we need to set ourselves up for success. Now is the time to minimize distractions and maximize productivity. Taking advantage of available technologies is key. You can start with mobile apps that can help you become more productive in your business. Below is a list of 12 apps that you may find to be beneficial: 1. Expensify Take photos of your receipts, then throw them away. Expensify’s system will automatically scan the image and fill out the details (e.g., amount, company name, etc.), generate your expense report in seconds, and keep you organized. 2. Facebook Ads Manager If you aren’t already advertising on Facebook, you should. Like Google, Facebook makes it easy for advertisers to manage their accounts while on the go. With Facebook’s

3. Outlook Mobile Outlook Mobile from Microsoft, helps you connect all your email accounts, calendars, and files in one app. Focused Inbox, swipe options, and notifications are just a few of the great features that will help keep you productive. 4. Google Drive/Docs/Sheets • Google Drive is the place to store all your documents (up to 15 GB for free). • Google Docs is the place to create, edit, and collaborate with your team on documents. • Google Sheets is the place to create, edit, and collaborate with your team on spreadsheets. 5. LinkedIn Get the LinkedIn app and find people to connect with, search for jobs, share your updates, and stay up-to-date on news about your connections from anywhere. 6. IF IF is the one app that will connect and control all of your other apps and your smart devices. You can literally automate your business—and your life. Developed by IFTTT (which stands for “If This Then That”), the app has thousands of “recipes” to help you take care of boring tasks so you can become more productive. Get it. 7. Salesforce1 For Salesforce users, the SalesForce1 app provides a nice, quick way to access data wherever you are, whether it’s dashboards, reports, tasks, customers, or leads. You also can add or create custom apps and build custom actions.

8. GoToMeeting Meetings are likely part of your everyday routine, whether it’s with clients or team members located at multiple sites. When everyone can’t physically be in the room together, GoToMeeting is the next best (virtual) thing. The app makes it easy to create or join meetings—anytime, anywhere. The sound and video quality is usually quite reliable, as long as you’ve got a good Internet connection. 9. Trello Who’s doing what? What’s in the works? What’s been done? Who needs help? Trello is an app for organizing your projects and tasks. Simply create cards and boards to keep your team on track, productive, and meeting deadlines. 10. Slack Are endless internal emails killing your productivity? Slack was created to help you with that. This easy-to-use app lets you share files, create discussion channels, and have ongoing discussions (in groups or via direct messages) in real time, no matter where you and your team are. Everything is archived and searchable. 11. Evernote Evernote is the app you can use to take notes, create lists, and save articles, images, and URLs—all while keeping your devices in sync. It’s pretty amazing. Use it. 12. Uber Are you still wasting time in taxi lines or hailing cabs, especially in big cities? Uber is a huge time-saver. Uber cars arrive quickly—within minutes of receiving your request. And while you’re being driven around, you can use all of the other awesome business productivity apps mentioned in this article to continue being (pardon the pun) uber productive! Sprin g 2 016

A KFCF Q uar te rl y

Legal Update

Hard Work Is Hard Work 6

By Ronald Gardner

One of the things about making progress, and changing culture, is that the work is never really done. The same can be true about brand building. Of course, the KFC system is in the midst of all of these—progress, cultural change, and brand building. While the progress that we made as a result of last year’s Acceleration Agreement is evident in a lot of ways, the hard work of actually bringing the Acceleration Agreement to life is now fully underway. Franchisees across the country have been engaged by signing up their restaurants (more than 2,500 at last count), and working with both LendLease, and various financiers, to secure the capital that will be required to make this incentive scope remodel a reality at these individual locations. As with any project of this magnitude, there have been a few hiccups along the way. However, as those issues have arisen, everyone seems quite focused on resolving them as efficiently and as effectively as possible—and typically, in a way that makes the most sense for the franchisee and the system. Across the country, remodels are being scheduled, plans are being drawn, and the hard work of our continued progress of reimaging the Brand goes on. The work of culture change also is ongoing. As part of our agreement with KFCC, there was significant restructuring of the NCAC—the way it goes about making decisions, who has control of what portions of the advertising budget, and the day-today decisions around the marketing efforts of KFCC, as well as more mundane details about when and where the NCAC and its committees will meet. During the last year, your NCAC has been working hard to make the new meeting 70

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Spring 2016

structure with KFCC work. Rather than having to attend multiple meetings over the course of multiple weeks (causing big expense to fund multiple plane flights and the disruption in your representative’s execution of their business), the new system brings everybody to the same place for almost a week to conduct all meetings, get a full download from KFCC on its current Brand strategy, and make the decisions that need to be made—all while face-to-face in Louisville. This structure still is being tweaked, but it seems that it is working as it was designed to work. The NCAC, and its subcommittees, have immediate access to KFCC and Yum! individuals when questions and issues arise, and our KFCC partners are working hard to make certain that any issues that might be controversial or of concern to the franchisees are laid on the table early, and a full and robust discussion on those issues occur. In those instances when consensus has not been quickly reached, the discussions have continued beyond the end of our meeting week in order to be resolved—including holding decisions over until the next meeting so face-to-face discussions may be continued if necessary. The result of all of this (that neither party force any issues unnecessarily), also is part of the hard work that we are doing to continue to build the culture. Everyone has recognized that the culture of trust is the big win—and everyone is working hard to continue to preserve and build on that culture. For the franchisee’s part, we continue to be committed to making the culture one that delivers the most influence possible. Accordingly, the NCAC has undergone a thorough review of the OEC, how it is selected, and how it is used. As you likely know by now,

this discussion has resulted in a recommendation that the OEC be pared down in size to a committee of eight franchisees (identical to the size of the other committees of the NCAC, including the National Marketing subcommittee, the Operations subcommittee and the Contracts and Facilities subcommittee), and that its membership be appointed by the NCAC vice chair. Unlike the other committees, however, because of the Regions’ long standing involvement in the selection of their own OEC representative, AKFCF Regional Presidents will be asked to nominate those who they believe would make valuable contributions to the OEC. The vice chair then will take those nominations into consideration when making his or her appointments to the OEC. This compromise likely allows us to continue to have Regional participation at the OEC, while at the same time, increasing the influence the OEC has with KFCC as a more nimble and responsive committee. While I know there are people who have concerns about what the NCAC is doing here, based on what I know, I have endorsed this approach and believe it to be a fair compromise to the issues that were being faced by the NCAC and its analysis that the OEC was not as effective as it once had been. As for brand building, besides the remodels that are rolling out, the ROCC program is in full force and effect. I reiterate what I have said to many of you over the last several months—use the tools that have been given to you to make sure that your ROCC scores are acceptable. There are extremely effective tools to training your crews on how to keep a restaurant in compliance with KFCC specifications and standards. Please use those tools as they will greatly decrease your w ww. akf c f . c o m

chances of having to face a failing score, and in the worst-case scenario, defaults based on failed inspections. While I appreciate that your crews change, and not everyone can be perfect every day, I reiterate the point of this article—hard work is hard work, and it never ends. At the end of the day, brand building is every individual store’s responsibility. We all must find a way to keep the RGMs engaged, and also assist those RGMs in keeping those who work for them engaged, proud to be part of the KFC team, and committed to the core element of brand building—Re-Colonelization. By the time you read this, most of you will either have completed your Spring meetings, or be about to attend them. This is the time of year when many of you really re-engage your RGMs. Your AKFCF has been supportive of the Re-Colonelization effort, and the rallies that have accompanied them. That is because there is a shared belief that keeping the RGMs fully engaged is something that needs to happen not only at the Spring Meetings, but also throughout the year. I encourage you to find as many ways as possible to make sure your RGM is part of the team, understands what the larger Brand strategy is, and executes those strategies at the restaurant level. Only then can we truly rebuild this iconic brand in the eyes of the chicken-loving public. Finally, I want to take just a moment to thank all of you for the tremendous support I have received over the last three years or so as the AKFCF General Counsel. You have accepted me as a member of the family, taught me, and trusted me. I cannot tell you how amazingly gratifying it is to be a part of your AKFCF family. I was humbled and overwhelmed by the gesture that the AKFCF gave to me at this year’s Convention, when Chris Fowler completely and unexpectedly announced my name as the winner of this year’s President’s Award. I will continue to do everything I possibly can to live up to the high expectations you have of me, and do all I can to make your life as a KFC franchisee easier and more profitable. I know that is hard work. And I also know it will never end. And I am extraordinarily grateful for the continuing opportunity.

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INDEX

Page ADVERTISER

49 Accuserv

51 Koch Foods

17 American Security Products

13 Pacific Premier Franchise Corporation

31 Auspex Capital

21 Paychex, Inc.

42 Café Valley Bakery

27 Pepsi Cola

45 Case Farms

1 Pilgrim’s

63 Coca-Cola

23 Procter & Gamble Distributing

C2 The Dallas Group of America Inc.

53 R.F. Technologies

55 Del Monte Foods Inc.

C3 Dr Pepper Snapple Group

25 RTI - Restaurant Technologies Inc.

43 Sesco

3 Ecolab Kay Chemical Company

6, 7 RSCS

67 Frontline International Inc.

26 Sprint Wireless

65 FSV Payment Systems

41 Stoelting

65 George H. Pastor & Sons

35 T&S Brass

11 Tyson Foods, Inc.

5 Gycor International

65 Hyginix LLC

59 Verdad Real Estate

65 Jamesway Construction Inc.

C4 Winston Industries

54 KFC Foundation

65 Worcester Industrial

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. Sprin Springg 2 016

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B a c k

Spring 2016

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A KFCF Q uar te rl y