AKFCF Winter 2015 by Lionheart Publishing Inc.

WINTER 2015

2016 CONVENTION

PREVIEW

The top 5 reasons why you don’t want to miss the 2016 Convention in Atlanta. Join us in celebrating our heritage and building our future.

Also Inside: Volunteerism • Franchisee Heritage • GAC Report

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2016 CONVENTION

PREVIEW

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The top 5 reasons why you don’t want to miss the 2016 Convention in Atlanta. Join us in celebrating our heritage and building our future.

Also Inside: Volunteerism • Franchisee Heritage • GAC Report

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NLRB Adopts New Joint Employer Standard By Dan Gans and Mary Donohue

The National Relations Labor Board adopted a broad definition of “joint employer” that may cause many companies to be responsible for the labor decisions of franchisees and subcontractors.

2016 Convention Preview: Join Us In Atlanta in February! By Kelly Rodenberg

The top 5 reasons why you don’t want to miss the 2016 Convention.

NCAC Report By Tom Slater

10 In the News 48 Merit Update

By Michael Kohlman

50 Beverages Report By Jody Luihn

52 OEC Report

By Bryan Robinson

By Lori Murray

56 RSCS Resource Services

At Kentucky Fried Chicken, volunteerism has always been part of the culture. It started with Colonel Harland Sanders, who made it part of his mission to help others, both in business and in life.

58 Finance Committee Report

Volunteering: The KFC Way

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GAC Report

2016 Convention Preview Get the insights to look beyond today and into what tomorrow holds. Connect with fellow franchisees to open doors to the impossible and sidestep daily challenges. Explore how to achieve better results for your restaurants, stay current on trends, and prepare for what’s next in 2016 and beyond. Photos: Atlanta Convention & Visitors Bureau.

Franchisee Heritage: We Are Family By Paul Gereffi

As the KFC business continues to grow and adapt to changes, so too does the franchise family grow as well.

By Lainie Yarmuth

By Jim McKenzie

59 Regional Short By Kevin Schlutz

60 Executive Director Update By Kelly Rodenberg

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From the Editor By Michelle Hunt

62 Legal Update By Ronald Gardner

64 Looking Back

President’s Report By Chris Fowler

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You Can’t Put A Price On Our Convention 6

By Michelle Hunt

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.

As we preview our upcoming AKFCF Convention, I always end up reminiscing about past Conventions. There were Conventions I attended while growing up in the KFC family – San Francisco, Hawaii, and Orlando – to ones attended while a working member of the KFC family – Nashville, where my father was AKFCF President and I first discussed working on the Quarterly with Jeanine, in Dallas where dad received the President’s Award, in San Diego where I was honored to receive the Colonel’s Legacy Award, and in New Orleans where I presented the same award to a dear friend. Then it occurred to me that next year’s Convention in Austin, Texas will be my son, Davis’ last before he heads to college. Wow, where has the time gone? There have been so many special moments shared with my own family, as well as my extended KFC family, that it’s impossible to pick just one favorite. Since joining our company, I’ve only missed one AKFCF Convention – due to a medical emergency – and I was on my way so that’s an “A” for effort, right? It’s like the Iowa State Fair…you just don’t miss it! Why do I share this? First to point out the importance of the AKFCF Family and the impact it has had on our family, company, and lives. Second, it is so easy to think “we know all the updates and there can’t possibly be any new information, or I’m sure they’ll share it with me eventually” mentality. The truth is, you can’t put 4

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a price on the interactions, new learnings, and motivation our Annual Convention provides the KFC Family. So yes, if you haven’t registered, then you should. Don’t want to fly? So drive; I am! I guarantee you will never regret spending this time with our family and absorbing the knowledge of others, as well as sharing some of your own. We’ve outlined what you can expect at this year’s Convention beginning on page 20. I hope to see you there! Speaking of the KFC Family, we have two features that celebrate our heritage and the giving spirit instilled by our founder, Colonel Sanders. On page 38, we profile a few multigenerational franchisee families and learn how they’ve continued the legacy of the Colonel. It never ceases to amaze me all the different ways our KFC Family gives back to their communities, both human and animal. Go check it out on page 30, and maybe it will inspire your next service project or charitable gift. As always, you will find reports from our Government Affairs Committee, NCAC, OEC, Beverage Update, RSCS Resource Services, Executive Director, Legal Counsel, as well as a Regional Short, and Finance and Merit Technology committee updates. Remember, all of these leaders will be at the upcoming AKFCF Convention in Atlanta. Don’t miss this opportunity to reunite and learn from our KFC Family. See you there! Warm Regards,

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 Jim McDonald, ext. 223 jim@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 www. akf c f . c o m

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P re s i d e n t ’s

A Mid-Term Interview With Chris Fowler 6

By Staff of AKFCF Quarterly

Chris Fowler became the president of AKFCF on July 1, 2015. Chris is a secondgeneration franchisee who started working in his dad’s company when he was 13. He is, like many of you, a “lifer.” As Chris finishes the first half of his presidency, the AKFCF Quarterly caught up with him to find out what he hopes to accomplish in the second half of his term. AQ: As you geared up to become the president, what was your most common emotion? CF: I was stressed out. I did not want to let the franchisees down. I was not sure I could stand up to the amazing accomplishments and leadership of the past presidents.

CF: That is an easy one: Kauai, for the Northwest Regional Fall meeting. I had never been, and I found that the Northwest has a great family, and it was a spectacular place to visit. I got a personalized tour from Ron [Gardner] while I was on the island that was an unbeatable experience.

AQ: As you look forward to the second half of your term, what do you think about most? CF: I spend a lot of time thinking about what I can do to help the AKFCF continue to be a great organization, and what else we might do to build up the franchisees.

AQ: Given that level of stress, who was your number-one “go to” person? CF: My wife Kim is my absolute number-one “go to” in all parts of my life. She is like my American Express card – I don’t leave home without her. Kelly Rodenberg also has made my job as president a whole lot easier. Without Kelly, thus far, I do not think I could have done this job at all.

AQ: Of all your achievements in the KFC system, of which are you the most proud? CF: I was extraordinarily honored last year to receive the AKFCF Legacy Award. Being part of the “KFC Family” always has been part of who I am, and for our family to be recognized as part of this bigger Family was extremely moving.

AQ: Given the management responsibility, which personal qualities turned out to be the most helpful this year? CF: I’d say honesty, my willingness to listen, and my willingness to be openminded. You have to be flexible in a job like this.

AQ: What new skills have you learned in the last six months? CF: I have really learned how to make effective use of my time management skills, and to be better at running meetings and calls. People’s time is valuable and I try to be respectful of that.

AQ: Do you have any major goals for the next six months? CF: We had our strategic, longrange planning session in the fall, and I am hoping that the work we did there can lay the foundation for better continued partnership with the Regions, with the Convention, and with KFCC. And I am hopeful that we can find a better way to ensure the time that people so freely give to us is used efficiently and effectively. If I can achieve that in the next six months, I will feel like I have left the presidency in a good spot.

AQ: Overall, what things did you most enjoy during the first half of your term? CF: It has been really interesting to me, a lifelong member of the Southeast Region, to see how other Regions operate. There are a lot of best practices out there that could be shared.

AQ: What is your favorite compliment that you have received so far this year? CF: It was a compliment from Ed Thomas, the regional president of SoCal, who told me he thought I was an approachable and transparent person. That meant a lot to me; it is important to me that people feel free to speak their mind, whether they are happy or dissatisfied with what we are doing.

AQ: Speaking of the Regional meetings, what was your favorite place to visit? 6

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AQ: For what (or for whom) are you most thankful in your role as president? CF: If I had to single out just one person that would be awfully hard. However, I do think Kevin Schlutz has provided amazing guidance. He is such a stabilizing force and his support has been incredible. On a more macro level, I am extraordinarily thankful for the entire AKFCF Family. I look forward to continuing to serve in the next six months, and in sharing what I have learned as I transition to the role of past president next year when I hand off the baton to Greg Atwell. www. akf c f . c o m

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All Elections Matter 6

By Tom Slater, NCAC Vice-Chair

As I write this, we are about a year away from the 2016 presidential election. I’m sure you would all agree that it will be another historic event and that the outcome is critical to our well-being. You will spend time over the next few months learning more about the candidates. You’ll want to be sure that your chosen candidate is smart, thoughtful, and has the best interests of our country in mind. Can he or she make this country a better place? Can this person help us regain the respect in the world that we once had? When he or she takes office, would they have the ability to listen to, learn from, and influence lawmakers? Why should your NCAC representative be any different? Yes, that’s a little melodramatic, but the reality is the NCAC makes decisions on behalf of the KFC system almost every day. Representatives work closely with franchisees from other Regions to try and understand regional differences. They work closely with KFCC leadership to provide thoughtful feedback on proposals. They learn new skills from our national advertising agencies so that they can help put the pieces of a puzzle together that results in sales, transactions, and profits for the system – not just for the short term, but for the overall health and welfare of this Brand for the future. Whether you own one, or five, 50, or 100 restaurants, the NCAC shapes your future, and I believe you should 8

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In REALITY, now MORE THAN EVER before, KFCC relies

HEAVILY on the NCAC for FEEDBACK and INPUT.

not only care about what that Committee does on your behalf, but you should want to make sure you are represented fairly. Recently, I was told that since the Acceleration Agreement passed, the NCAC doesn’t really matter – “KFCC makes all the decisions anyway.” In reality, now more than ever before, KFCC relies heavily on the NCAC for feedback and input. With their new “power” comes immense “accountability,” something they do not take lightly. Before, if a promotion or new product didn’t work, KFCC could blame the NCAC franchisees. In this improved structure, KFCC needs and seeks our unique insights to ensure decisions are as right as possible. As a result, Regional representatives have more opportunity to influence the outcome of proposals. That is why you should care about who is on the Committee, and more importantly who you elect from your Region. Last June, the franchisees on the Committee discussed what we believe are the best characteristics of an NCAC representative, and built

a sort of job description. We shared this with the AKFCF, as many system leaders are first active in their individual Regions. Included in this article is a summary of the Overview & Qualifications we believe make the most effective board member. If you, or someone you know, are interested, it’s important to get involved now. We soon will be entering the spring NCAC election cycle. Representatives serve three-year terms, with no term limits, and elections are staggered. In March and April, Regions 2, 5, 8, and 9 will have elections. But just because your Region may not be having an election, that doesn’t mean you shouldn’t start thinking about the future, especially if you are interested in getting involved in the process. As the Colonel himself once said, “I’ve only had two rules: Do all you can and do it the best you can.” Are you doing all that you can do to make this system and our Brand better? Start by getting involved – get active in your AKFCF Region, talk to your NCAC Representative, and VOTE in the spring elections. www. akf c f . c o m

Overview & Qualifications for Effective NCAC Board Members Committee’s Purpose & Authority • “The business and affairs of NCAC, other than those matters delegated or assigned to the Brand Committee or assigned to KFCC pursuant to NCAC’s Certificate of Incorporation or these Bylaws, shall be managed by a governing body to be known as the Committee….” • Approve the NCAC annual budget. • Review and provide input on an advisory basis for all matters to be considered for approval by the Brand Committee. • Individual representatives are accountable for communicating and advocating for decisions made by the Board. • Select Board members to serve on the Brand Committee.

Eligibility • The Committee is made up of 12 elected representatives who serve three-year terms and may be re-elected. Also on the board are the President of the AKFCF and four representatives appointed by the president/GM of KFCC. • To be elected, the candidate must be a Franchisee of Record in good standing with the NCAC or an “active employee or partner” of a member in good standing who spends at least 50% of working time devoted to the KFC business. • A single franchisee/franchise organization may not have more than one representative elected to serve on the NCAC. • An elected representative may be removed from the Board either by the Region or by an affirmative vote of at least two-thirds (2/3) of the members of the Committee.

Qualities for an Effective Board Member • A passion for the Big Brand – a Board member should put the Brand first, then the Region, and finally his or her own business. • Strong leadership skills, including ability to influence other franchisees, as well as KFCC leadership. • Experience in other franchisee organizations, including AKFCF Regions, NCAC Sub-Committees, OEC, local advertising Co-ops, National Purchasing Co-op, etc. • Able to actively participate in at least four in-person meetings, primarily in Louisville, lasting 3-5 days including travel time, as well as teleconferences sometimes scheduled with limited notice. • Strong communication skills, as representatives may be asked to present NCAC plans or updates at Regional and/or local co-op meetings, as well as be able to clearly articulate questions or concerns during NCAC meetings. • Belief in “team together, team apart” as the representative should be prepared to defend decisions made by the Board regardless of whether they were in agreement when voting. • Strong knowledge of KFC Restaurant Operations, with a demonstrated passion for executional excellence. • Some knowledge of marketing functions including media, merchandising, public relations, consumer research. • Clear understanding of the KFC Franchise Agreement and contractual implications. • Board members must uphold their legal and fiduciary responsibility

to maintain confidentiality in discussions and deliberations until they are deemed approved for system communication.

Sub-Committee Appointment A Board member may be appointed to one or more sub-committees based on his or her knowledge and abilities, including the following: • Marketing Sub-Committee (max. 8 franchisees, not required to be on NCAC) • Operations Sub-Committee (max. 8 franchisees, not required to be on NCAC) • Contract & Facilities Sub-Committee (max. 8 franchisees, not required to be on NCAC) • Restaurant Economics Sub-Committee (max. 3 franchisees, not required to be on NCAC, and agreed upon by the vice-chair and KFCC president) • KFC National Purchasing Co-op Board (2 NCAC Reps) • Operations Excellence Committee (1 NCAC Rep) Additionally, ad hoc sub-committees may be formed with a defined purpose, scope, and duration agreed upon by the chairman and vicechairman of the NCAC. For example: Beverages, Technology, 1-800, and Audit. If appointed, the Board member will need to be able to participate in calls and/or meetings as scheduled.

Elected Board Positions The “Nominating Committee” is comprised of the four Regional franchisees whose terms expire in the coming year, and their role is to nominate franchisees to serve in specific, elected roles including: • Vice-Chairman • Brand Committee (2 franchisees, in addition to 2 KFCC reps appointed by the KFCC president) • Executive Committee (3 franchisees + vice-chair, and KFCC president/GM) Any franchisee Board member may be elected by a vote of the full board to these positions.

Shadows & Special Guests Members of the NCAC in good standing and special guests may attend meetings of the Committee and, upon agreement of the chairman and vice-chair, may have participating privileges (exclusive of voting). The NCAC encourages the AKFCF to identify shadows for Regions one year in advance of an upcoming election. Shadows will be provided with the opportunity to attend NCAC New Member Orientation, as well as marketing and financial functional training. Shadows will be allowed to participate in NCAC meetings and calls. However, due to the highly confidential nature of some NCAC Committee discussions, the Board may go into closed session and visiting members and/or shadows will not be allowed to participate. Generally, these discussions may include matters of personnel, budget, franchisee delinquencies, agency fees, contracts, etc. The Region (or the Shadow) will be responsible for all expenses related to meeting attendance.

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Restaurant Index Climbs in October In its monthly report card on industry performance, the National Restaurant Association’s (NRA) Performance Index showed a moderate increase in October, strengthened by data that showed 61 percent of operators reported gains in samestore sales in October in 2015 compared with October 2014. That percentage is up from 51 percent of restaurant operators who reported gains in year-over-year business in September, according to a news release from the Washington, D.C.based NRA. “The October gain in the RPI was buoyed by broad-based improvements in the current situation indicators,” Hudson Riehle, senior VP of the Research and Knowledge Group for the Association, said in the release. “In addition, restaurant operators are somewhat more optimistic about both sales growth and the economy in the months ahead.” The Restaurant Performance Index – a composite score tracking the health of the restaurant industry – was 102.1 in October, up 0.7 percent compared with September. A score above 100 reflects restaurant industry expansion, according to the release. The October score was the 32nd consecutive month that the index was above 100. Restaurant operators polled were fairly optimistic about sales trends in the next six months, according to the release. The NRA said 40 percent of operators said they expect to have higher sales in six months, up from 35 percent who responded that way in September. Source: thepacker.com Walmart, KFC, Taco Bell and Southeastern Grocers Partner with GED Testing Service to Launch GEDWorks GED Testing Service has partnered with some of the nation’s largest employers and most recognizable brands – including Walmart, KFC, Taco Bell, and Southeastern Grocers – to create GEDWorks, a comprehensive program free for employees who want to earn their GED credential. The GEDWorks program includes everything an employee needs to 10

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successfully prepare for and pass the GED test. Students are provided access to a GED advisor, online GED study material, connections to local adult education programs, practice tests, and more. GED advisors are a key element of GEDWorks and help guide, engage, and motivate students. GEDWorks also helps keep graduates moving forward after completing the tests by connecting them with college and career pathways tools on GED.com.

their participating employees is another key element of the GEDWorks program. “Taco Bell believes in helping our Team Members get more out of life – starting with an education,” said Taco Bell Global Chief People Officer, Frank Tucker. “GEDWorks is great because it gives our employees everything they need to prepare for and pass the GED test on their own flexible terms. Not only are we developing our Team Members and

GEDWorks is one indicator that national employers understand the value of the new GED program, which is focused on better preparing learners to compete in today’s job market and to successfully enter post-secondary education programs essential to most 21st century jobs. This effort also marks the first time national employers have banded together to support a program aimed solely at decreasing the number of adults without a high school diploma, an important step in improving the country’s economic competitiveness. “Employers have invested in this national program with GED Testing Service to boost the education levels of their employees because they recognize the benefits of the enhanced GED program and the importance of education in the lives of their employees,” said Randy Trask, president of GED Testing Service. “The program offers a cost-effective way for employers to help adult learners achieve their goals and invest in their futures. Students earning a GED credential enhance their career prospects and earning potential.” The support that employers show

creating an engaged workforce, but we’re also inspiring these valued Team Members to champion their potential, education, and future.” “Walmart believes that education is key to an associate’s personal and professional development,” said Michelle Knight, VP of talent development for Walmart U.S. “The opportunity to earn a market-valued credential helps our people gain skills to advance their career. Achieving success with the GEDWorks program is a gateway to opportunity.” The program is completely free for learners. It is fully funded by employers or, in the case of KFC, by the associated charity, Kentucky Fried Chicken Foundation. The only investment needed by students is time and energy to prepare for the test. “Restaurant operators love that the GEDWorks and other Foundation programs help them recruit and retain highquality employees who are interested in working hard to improve themselves. The KFC Foundation is proud to be able to support them, and continue Colonel Sanders’ legacy of helping people be their best selves through education,” said www. akf c f . c o m

Krista Snider, managing director of the KFC Foundation. “Now that I have my GED, it takes away that little bit of shame and embarrassment [of not having graduated from high school],” said Courtney, an employee of Winn-Dixie/Southeastern Grocers in Alabama and one of the first graduates of the GEDWorks program. “My GED advisor was very encouraging and friendly throughout the process – she addressed all of the concerns I had along the way. I think others should go for it as well!” For more information, watch a brief YouTube video about the program (http://bit.ly/1OQFhrh), and visit the GEDWorks Media Kit web page at http:// www.gedtestingservice.com/educators/ gedworks-media-kit. Source: Yum.com KFC South Africa Launches TV Ad for World Hunger Month KFC’s Add Hope initiative feeds more than 100,000 children in South Africa every

day. This year, to drive awareness of the initiative KFC launched the Brand’s first-ever Add Hope TV advertisement during World Hunger Month this past October. The advertisement brings to life the difference a nutritious meal can make for a child. Even more special, is the fact that the creative direction for the commercial was inspired by using nearly 1,000 drawings

created by 250 children at Afrika Tikkun, one of Add Hope’s local beneficiaries. To learn more about Add Hope please visit: http://www.addhope.co.za. Watch a behind-the-scenes video online (http://bit.ly/1M04CKS) to see how the creative team managed to bring this beautiful story of hope to life Source: Yum.com

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CONDOLENCES Lucille “Lucy” DeWitt passed away on Oct. 9, 2015 in Nacogdoches, Texas, one day after her 90th birthday. Lucille and her late husband, Richard DeWitt Sr., started their KFC franchise in 1964 with restaurants in Nacogdoches and Lufkin, and they later expanded to 68 other locations across the state of Texas. Lucile was known as a civic leader and philanthropist. She sponsored Nacogdoches Crime Stoppers and with the help of her friend, Dr. Glenda Walker, she and her husband contributed to the establishment of the Richard and Lucille DeWitt School of Nursing at Stephen F. Austin State University. John L.Hannon, age 88, passed away Nov. 3, 2015. The Alabama native and WWII veteran joined the KFC family in 1962, opening

his first restaurant in Jackson, Miss. He was an avid sportsman who especially enjoyed hunting and fishing; often flying his own plane to secluded spots. Hannon was preceded in death by his wife of 63 years, Lolita Starnes Hannon. He is survived by his sons, Mike Hannon; Mitch (Becky) Hannon; Kirk (Stacey) Hannon; and his grandchildren, Kenzie, John Porter, Elizabeth, and Caroline. Carolyn Denman-Simpson, sister of franchisee Brian Denman, passed away on Oct. 21, 2015 in Freeland, Mich. She was 56 years old. Carolyn had a great love for music. Her faith was strong and so was the love for her family. She devoted much of her time to the family business. On Apr. 4, 2009 Carolyn married Donald B. Simpson; he survives her.

She also is survived by her eight children, six grandchildren, her brother and two sisters, as well as her father and mother-in-law. Earle M. “Bud” Goodnight, 79, passed away on Aug. 18, 2015. Born in Lafayette, Ind., Bud wore many professional hats (including real estate agent and hotelier) before marrying Anne Price McKenzie in 1996 and helping her to manage her four KFC restaurants in Indiana. Bud is survived by his wife, Anne; his three children, Lowell Todd Goodnight, Terri Ione Goodnight Matheney (husband, John), and Kirk Alan Goodnight (wife, Stacey); and three step-children Jennifer McKenzie Butterworth (husband, John), John McKenzie (wife, Jill), and Jim McKenzie (wife, Sarah); as well as 10 grandchildren.

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) 12

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NCAC – National Council and Advertising Cooperative NFAC – 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 www. akf c f . c o m

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NLRB Adopts New Joint Employer Standard “I will be introducing a bill to invalidate this harmful ruling and restore an appropriate legal standard for determining who is a joint employer.” – Sen. Lamar Alexander (R-TN) On August 27, the National Relations Labor Board (NLRB) adopted a broad definition of “joint employer” that may cause many companies that use the franchise or contracting model to be responsible for the labor decisions of franchisees and subcontractors. The “joint employer” standard is used to determine whether an entity that is not the official employer of an employee or group of employees must be considered an employer, comply with various obligations required of the official employer, and be subject to liability for failing to comply with such obligations. Joint employment might now be deemed to apply to many different types of employment structures, including franchisors, temp agencies, parent companies, secured lenders, and other entities. Prior to the decision, an employer as an entity would have to have direct and immediate control over essential terms and conditions of employment in order to be responsible for labor decisions. With the new

By Dan Gans and Mary Donohue

ruling, employers with indirect and potential control over employment now share that same responsibility. These new indirect standards only apply in cases governed by the NLRB at the moment; however, other special agencies in the administration have all expressed an interest in using a similar doctrine going forward.

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Browning-Ferris Decision Browning-Ferris Industries (BFI) of California, Inc. owns and operates a recycling facility. BFI solely employs approximately 60 employees engaged in tasks primarily outside of the recycling facility while also engaging with Leadpoint Business Services (Leadpoint), an employment agency, to provide approximately 240 of Leadpoint’s employees to work inside the recycling facility. BFI’s contract with Leadpoint states that “Leadpoint is the sole employer of ” the Leadpoint Employees and that “nothing in the Agreement shall be construed as creating an employment relationship between BFI” and the Leadpoint employees. The Union petitioned the NLRB to represent the Leadpoint employees and argued that BFI and Leadpoint jointly employed the Leadpoint employees.

In a vote of 3-2, the NLRB adopted the new standard for the following reasons: 1. BFI’s significant control over who Leadpoint could hire to work at the BFI facility. Some controls included requiring that Leadpoint meet and exceed BFI’s own standard selection procedures, and requiring Leadpoint applicants to undergo drug tests. BFI also retained the right to reject any worker deemed ineligible. 2. BFI controlled various processes that shaped the day-to-day work of the Leadpoint employees, such as the speed and productivity standards for sorting; imploring workers to work faster and smarter; assigning tasks to be completed by performance; the timing of the shifts and when overtime was necessary; and also required a BFI representative to sign the time records of the Leadpoint employees.

AKFCF – P o l i t i ca l A c t i o n C o m m i t t e e (PAC) The AKFCF created a Political Action Committee (PAC) to make sure our voices are heard in Washington, D.C. The AKFCF Government Affairs Committee and the AKFCF PAC Board of Directors would like to thank the franchisees listed below for their contributions to the AKFCF PAC. Each quarter, we list the names of the franchisees who have supported the PAC at time of print as a token of our appreciation. This list is all the contributions, broken down by region. We encourage you to please join your fellow franchisees and support your AKFCF PAC. For information on how you can become involved, or if you don’t see your name and should, please contact Ray Aley, treasurer of AKFCF GAC/PAC at (802) 318-4705, or via e-mail at KFCRay@aol.com. GREAT LAKES Jeanine Bagshaw Frederick Bauer David Bell Kathy Bouwman Keith Chambers Brian Denman Alessio DiFranco Deanna Freeland Anne Goodnight Steve Harden Ned Hoelzer Lesley Hottinger John Jefferis John & Joe Klobucar John Kovach Craig Lee LaDonna Lewis John Masters Lynn Mayer Jim Mikula Diana Myers David & Susan Myles Marvin Payne Susan Stuver Shirley Vangeloff Scott Vorrath Shelly Vorrath Nanette Walker Terry Watkins Brian Wheeler Chad Wheeler Larry Wheeler Robert Widder Noreene Wojcik Rebecca Yocum

Tom Ceconni James Cocolin Neil Cocolin Keith Cole David E. Evans Joe Farley Randall Flock Frederick Gallant Nabil Gazaha Ronald Giles Michael Houston Becky Lide-Fowler Martin Lobdell Wayne Lobdell Donald Lopes John Marsella Jr. Dale Moulton Dennis Naughton Steve Pinkerton Robert Rianna Alex Rosenblum Ric Rozier Karen Silverstein Eugene A. Skowronski Larry Starkey Matthew E. Thurston Pinakin “Ken” Vachhani James Waters David R. White NORTHWEST Frederick Baker Bob & Karen Carle Ralph Harman Brett Harris Joseph & Charlene Oleinik Steve Prendiville Donald Steinke Ken & Jane Wall Calvin White

NORTHEAST Wahid Akl Ray E. Aley III Tony Cameron

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SOUTHEAST Wiley Dean Felker Felker Chris Fowler Robert Fulmer Michael Galloway Gregory Hamer Owen Harris Minton Hester Lloyd Hodges Jr. Mike Hubbard Sims Johnson Joseph Kendell Larue Kohl Robbie Ludlum Walter Lyon Johnny Matlock Nancy Mook Angela Ogle Eric Overcash Ashley Page John Pankratz Vic Peeples Jake Rasor Robert Rials Sr. Terry Rogers Linda Rosenbalm Fred Ruth Sr. Frank Rutledge Jr. Gurpreet “P2” Sandhu Leslie Sharp Bill & Bonny Shelton Marcus Shelton Jay & Kelly Shoffner Jon Simmons John Sims George Tinsley Betty Walker Jeff Wallace Bill West Charles “Tim” West

Richard West Steve West Daniel Yagoda SOUTHERN CALIFORNIA Charles Buckner Tony Frazier Ranjit Gaddu Robert Prendiville Eddie Sheldrake SOUTHWEST Debra Ashmore Richard Cahill Rudy Garcia Don Jackson Rajeev Jain Jeff Lickteig Franklyn Nye Eddie Rivera Brandon Robertson Doyle Sanders Thomas Slater UPPER MIDWEST Dale Black Sharon Clawson Donald DeLaria Gene & Margaret Duenow Peter & Holly Helf Michael Kulp Terry Moffit Kevin Schlutz Susan Schmidt Doug Smith Gary Tiedeken Jim Olson (Harman) Jeffrey Van Dyke Pete & Mary Wasilevich

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3. BFI also exercised influence over wages paid by Leadpoint to Leadpoint’s employees, including prohibiting Leadpoint from paying such employees more than BFI pays its own employees and requiring BFI’s approval over pay increases.

Implications of the Browning Decision The NLRB’s decision to adopt the new joint employer standard has been met with immense backlash from the franchise community. Although the Browning decision involved the relationship between an employee staffing agency (Leadpoint) and its client (BFI), there has been expressed concern that the Browning decision signals an end to franchising and other similar relationships that might now be held to a new joint employer standard using a similar rationale. In short, it has been suggested that the ruling may make businesses liable for the employees of businesses they contract with and that those employees now effectively work for those who did not hire them, or set their schedules, salaries or benefits. The NLRB’s decision has the potential to significantly alter the current franchisee/franchisor relationship. It could eliminate the option of owning a franchise for hundreds of thousands of American small business owners. Further, it could harm millions of small businesses that provide work as subcontractors – such as temporary staffing or auto parts suppliers. The decision might even reduce any incentive for a corporation to sell franchises or to parcel

out business to subcontractors, suppliers or subsidiaries. The long-standing joint employer doctrine under the National Labor Relations Act (NLRA) has protected small businesses from liability of workplaces over which they have no involvement. Two employers may be considered “joint employers” only when they share direct and immediate control over essential terms and conditions of employment, including hiring, supervision, and direction. The expanded joint employer definition may make businesses liable for employees they do not employ and threatens small business owners’ control of their operations. Restoring this definition of joint employer will provide regulatory certainty for small businesses across the country.

Protecting Local Business Opportunity Act On Wednesday, September 9, Republican leaders of the House and Senate labor committees introduced legislation to combat the NLRB’s harmful ruling. Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN) and House Education and Workforce Committee Chairman John Kline (R-MN-02) each introduced their “Protecting Local Business Opportunity Act.” The bills essentially would force a return to the definition in which companies can only be considered employers if they have “direct and immediate” control over workers. Both Sen. Alexander and Rep. Kline’s staff have encouraged grassroots efforts with the Coalition to Save Local Businesses to support their bills.

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2016 Convention Preview

JOIN US in

ATL

THE TOP 5 REASONS WHY YOU DON’T WANT TO MISS THE 2016 CONVENTION By Kelly Rodenberg

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FEBRUARY! 1) Learn From AKFCF And KFCC Leaders Get the insights to look beyond today and into what tomorrow holds. Connect with fellow franchisees to open doors to the impossible and sidestep daily challenges. Explore how to achieve better results for your restaurants, stay current on trends, and prepare for what’s next in 2016 and beyond. Experience up to a year’s worth of education, training, business development, and networking in only four days. The AKFCF Convention is the best and biggest resource for KFC franchisees. Get inspired and discover new ideas and information with eight educational workshops. With partners of AKFCF, KFCC, NCAC, and RSCS, you’ll go on a journey that is both stimulating and action-driven. Experience thought-provoking sessions on all the topics you need to know, from building better restaurants through technology to delivering best-on-block operations to effective employment practices. The diversity of this group’s experiences paired with a hands-on style environment will let you recharge, reimagine, and redesign the future of our KFC Brand. Win ter 2 015

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CONVENTION SCHEDULE Tuesday, Feb. 2, 2016 8:00 a.m. – 12:30 p.m. 12:00 p.m. – 7:00 p.m. 2:00 p.m. – 5:15 p.m.

Community Service Event Registration Workshops

Wednesday, Feb. 3, 2016 7:15 a.m. – 8:30 a.m. Breakfast Buffet 8:30 a.m. – 9:30 a.m. Opening General Session – A soulful and vibrant keynote address from AKFCF President Chris Fowler begins the Convention Celebration 9:30 a.m. – 9:45 a.m. Break 9:45 a.m. – 12:00 p.m. KFCC Presentations 12:00 p.m. – 1:00 p.m. Lunch 1:15 p.m. – 5:30 p.m. Workshops 5:30 p.m. – 8:30 p.m. Welcome Reception in the Exhibit Hall Thursday, Feb. 4, 2016 7:15 a.m. – 8:15 a.m. 8:30 a.m. – 12:00 p.m. 12:00 p.m. – 2:00 p.m. 2:15 p.m. – 3:45 p.m. 2:15 p.m. – 5:15 p.m. 5:15 p.m. – 7:15 p.m.

Buffet Breakfast Closing Session –The celebration of our Brand continues and you’ll see how our future can develop into a work of art. Lunch – Vendor Showcase Vendor Q&A with KFCC, AKFCF, and RSCS Leadership Workshops Reception – Vendor Showcase

Friday, Feb. 5, 2016 8:15 a.m. – 10:15 a.m. Regional Association Meetings 10:30 a.m. – 12:00 p.m. AKFCF Town Hall – Franchisees Only ARL/RGM Workshop 12:30 p.m. – 2:30 p.m. AKFCF Board Meeting 2:45 p.m. – 4:00 p.m. NCAC Annual Meeting 6:30 p.m. – 10:30 p.m. Final Night Gala *Schedule subject to change. Visit www.akfcf.com for updates and to register online.

On-Site Check-In

On Tuesday, Februar y 2 from Noon – 7:00 p.m., attendees may check in by Region at the AKFCF Registration Desk to pick up name badges, tickets, and program guides. 22

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2) To Visit a Great City and All It Has to Offer With new transportation options, new attractions, and new shopping destinations, the city of Atlanta is making itself irresistible to those looking for a fresh and novel getaway. And like KFC, Atlanta represents the same core values of Southern hospitality, history, and culture. This yearâ&#x20AC;&#x2122;s Convention will be held at the Marriott Marquis Hotel, which is centrally located in the heart of downtown Atlanta. All of the guestrooms and the majority of the meeting space are being completely renovated and will be brand new for our groupâ&#x20AC;&#x2122;s arrival in February. The much-anticipated Atlanta Streetcar made its grand debut in 2015. It makes a 2.7-mile loop around downtown, connecting major sights and centrally located hotels. The newly opened Center for Civil

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and Human Rights adds another high-profile attraction to downtown’s Pemberton Place, alongside the Georgia Aquarium and the World of Coca-Cola. For you football fanatics, the new College Football Hall of Fame recently opened, showcasing 50,000 square feet of interactive fun and information about your favorite college team! For those wanting a bit more thrill and speed, you can take a test drive at the Porsche-Driving Experience center adjacent to the Atlanta airport. On the retail front, the upscale neighborhood of Buckhead continues to see new shops, restaurants, and cafes. And the new Ponce City Market houses a popular food hall, plus activities such as rooftop mini golf and bocce. The hall is modeled after New York City’s Chelsea Market with local chefs, vendors and artisans. Atlanta is the home of two Nobel Peace Prize winners – the Rev. Dr. Martin Luther King Jr. and former President Jimmy Carter. For you history buffs, take the time to trace the life of MLK by visiting his birth home, the church where he served as pastor, and his final resting place at the King Center. At the Jimmy Carter Museum, view objects from Carter’s presidential run and beyond. Fans of the movie “Gone with the Wind” will want to make time to take a tour of Margaret Mitchell’s House.

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HH H H Atlanta extends beyond the typecast Southern City and so will the 2016 Convention.

3) To Serve Those In Need The AKFCF is proud to provide an opportunity for attendees to give back while in Atlanta by participating in a hands-on project that will benefit the Atlanta Community Food Bank (ACFB) and the people they serve. The mission of the ACFB is to fight hunger by engaging, educating, and empowering their community. 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. Food Bank trucks pick up goods from food drives, grocery stores, and manufacturers, and drop them off at the Product Rescue Center (PRC) every day. Constantly buzzing with activity, the PRC is the area of the Food Bank where all food drive

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HH H H and salvaged food items are brought to be inspected and packaged by volunteers for distribution to more than 600 nonprofit partner agencies. On Tuesday, February 2, our volunteers will inspect, sort, and pack these goods. 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. Canâ&#x20AC;&#x2122;t volunteer on Tuesday? AKFCF attendees still can make an impact by donating during the Convention. Drop off your check or cash at the designated location in the Exhibit Hall. For more information on how to get involved, please contact our Service Chair, Sheri Widder, at kfcserves@gmail.com, or call (614) 873-6050.

4) Experience the AKFCF Vendor Showcase Get prepped for two non-stop days of seeing, tasting, and testing all that is available to make your KFC restaurant the best on block! Whether you want to try out new equipment, brush up

HH H H Keynote Speaker Erik Wahl Our keynote speaker, Erik Wahl, will demonstrate through his live paintings and presentation how we all can create a strong future. As our business landscape continues to change, we need to stay ahead of the game by fostering a steady stream of creative strategies and unexpected solutions to revive stagnant markets or completely reinvent the competitive dynamics of our industry. This is called disruptive thinking requires a culture of innovative leadership, which can provide the framework and motivation to generate those strategies and to execute those solutions. In his multi-media keynote experience specifically designed to challenge audiences to achieve superior levels of performance, Erik will inspire us to let go of our traditional thought patterns and better understand how to create disruptive strategies of innovation.

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on emerging trends, collaborate with more than 200 foodservice pros, or get hands-on experiences, the AKFCF Vendor Showcase has what you need. Maximize your time through an exhibit hall of all-out opportunities. Thank you to the below vendors who also have sponsored the AKFCF Convention at the Diamond, Platinum and Gold levels! PepsiCo Diamond Pilgrim’s Platinum Plus Dr Pepper Platinum LendLease Platinum RSCS Platinum Aryzta Gold Ecolab Gold McLane Gold Wells Fargo Gold Winston/ Gold Collectramatic At the AKFCF Vendor Showcase, you’ll feel the buzz everywhere – that surging energy connecting you with your partners and accelerating the pace for success. This truly is the power source for KFC franchisees.

The Convention will be held at the Marriott Marquis in downtown Atlanta.

Hotel Information

Atlanta Marriott Marquis Hotel 265 Peachtree Center Ave. NE Atlanta, GA 30303 (404) 521-0000 http://www.marriott.com/hotels/travel/atlmqatlanta-marriott-marquis/ 26

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HH H H 5) To Celebrate Our Success and Have Fun This year’s Final Night Gala will focus on good ol’ down home Southern hospitality, food, family, and music. The entertainment for the night also has a remarkable heritage and strong future. Lynyrd Skynyrd had established themselves as one of the most successful rock bands of the ’70s by the time they released “Street Survivors” in October 1977. The group’s career would come to a tragic halt just three days later, on Oct. 20, 1977, when their twin-engine plane went down in a swamp in Gillsburg, Miss., killing three of the band members, a tour manager, and both pilots. The group had put together a string of iconic hits including “Free Bird,” “Gimme Three Steps,” and “Sweet Home Alabama” prior to the release of “Street Survivors.” Anticipation for the new album was so high that it went gold within days, and Lynyrd Skynyrd embarked on the most ambitious headlining tour of their career, traveling between concert dates in their own airplane. Rock legend has it that Aerosmith had looked into renting the same plane earlier in the year, but passed on it due to concerns over both the safety of the plane, and the readiness of its crew. Lynyrd Skynyrd were traveling from Greenville, S.C., to Baton Rouge, La., when their plane apparently ran out of fuel toward the end of the flight. The pilots attempted to land on a small airstrip, but the bottom of the plane clipped some trees, and the aircraft went down in a remote stand of forest. Skynyrd singer Ronnie Van Zant, guitarist Steve Gaines, vocalist Cassie Gaines, assistant road manager Dean Kilpatrick, pilot Walter McCreary, and co-pilot William Gray were killed instantly, while the other band members and road crew suffered terrible injuries. Drummer Artimus Pyle and two crew members crawled from the wreckage and hiked through swampy woods until they finally flagged down a local farmer, who sent for help. Following the crash and the press attention that came along with it, “Street Survivors” became Lynyrd Skynyrd’s second platinum album. Devastated by the loss of their singer and the injuries sustained by the survivors, Lynyrd Skynyrd disbanded after the accident, leaving the survivors to try to make their own way with varying degrees of success. The next decade would see the musicians pursuing a number of projects individually, however, the band reunited in 1987, with Gary Rossington, Billy Powell, Leon Wilkeson, Artimus Pyle, and guitarist Ed King – who had left the band two years before the crash – joined by Ronnie Van Zant’s younger brother Johnny as their new lead singer. www. akf c f . c o m

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Slug Convention Preview 2016

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Header Deck

Questions

If you have questions or require additional Convention information, please contact Debbie Newton at (866) 868-4750, or via e-mail at debnewton@akfcf.com. Author Stay informed, engage with your peers, and provide real-time feedback at this yearâ&#x20AC;&#x2122;s An nual Convention in Atlanta. Follow the activity by searching the #AKFCF16 hashtag and add it to all your ideas , photos, and posts about AKFCF Annual Convention. The meeting app with detailed informatio n about Convention will be available soon.

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To this day, the band has been hit with more tragedy among its band members, but they continue to move forward with new talent to keep the legendâ&#x20AC;&#x2122;s music alive. Help us close out the Convention with a night to remember.

On-Site Registration If you did not register in advance, you can still register on-site in Atlanta. On-site check-in will take place on February 2 from Noon â&#x20AC;&#x201C; 7:00 p.m. The onsite fee is $350. For hotel reservations please call the Marriott directly at (866) 469-5475. Group room rates will be based on availability.

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Volunteering: The KFC Way

By Lori Murray

t Kentucky Fried Chicken, volunteerism has always been part of the culture. It started with Colonel Harland Sanders, who made it part of his mission to help others, both in business and in life. Today, that culture of giving back is more widespread than ever, but the AKFCF Family is approaching it in new and exciting ways that speak to our own passions. 30

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That’s certainly the case with the people we feature in this year’s article about volunteerism. In both instances, they’ve been successful at applying their strengths, experience, and expertise to areas that benefit others. We invite you to take a closer look at the volunteerism stories behind AKFCF Executive Director Kelly Rodenberg and franchisees Jake & Elizabeth Rasor. wwww. ww. akf akfccff..ccoom m

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KELLY RODENBERG

As executive director of the AKFCF, Kelly Rodenberg spends much of her time engaging and working with people. And while she enjoys that role, she is equally thrilled with the role she takes on as a volunteer for dog rescues. In fact, you might say she’s passionate – maybe even fanatical – about man’s best friend. “Volunteering for dog rescues takes up my spare time, energy, and sometimes my money. It can be hard work,” Rodenberg said. “I see and do things that are challenging and even a little scary. My house is full of craziness; it’s home to as many as six dogs at any given time. So we are never short on dog hair, slobbery kisses or wagging tails.” In spite of the chaos, Rodenberg is committed, and her work is making a big difference in the lives of many of her furry friends and their future owners. Rodenberg admits that she’s always loved animals. As a child, she wanted to be a veterinarian, but she didn’t have much faith in her ability to conquer chemistry and physics – required coursework for a veterinary degree. During college, she advocated for animal rights and even picked up strays. But although she was completely committed to the cause, she failed miserably when it came to volunteering in an animal shelter. “I tried, but every time I walked in, I walked away in tears,” she recalled. “I was disappointed in myself for not being strong enough to help them.” Working with dog rescues Later, however, when a friend suggested that she could make a significant impact by working with a dog rescue, she started to volunteer with Midwest Labrador Retriever Rescue (MLRR). At that time, she already was the owner of three labs, so it seemed like a good fit. She started by volunteering at MLRR’s booth during trade shows and at local pet stores. It was a good start, but Rodenberg wanted to be closer to the dogs. She agreed to help with transportation, and that’s when her level of involvement changed. Transporting rescue dogs is a time-consuming process that requires the dedica-

Kelly working a local pet trade show to provide awareness for rescues and dogs for adoption.

tion of several individuals. The transport is broken down into “legs,” which typically are about 50 to 75 miles each. The transport is posted to groups of drivers with the hope that a volunteer driver will offer to drive one or more of the “legs.” Operating like an underground railroad, the drivers transport the animals along the entire route from shelter to rescue. “The process of transports is a well-oiled machine when 32

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Puppies: This time of year, many that were given as Christmas presents are returned to shelters and rescues.

done correctly, and it requires many man hours,” Rodenberg said. “But when I meet the dogs and see in their eyes that they know they are safe, it’s very rewarding.” In addition to helping with transportation, Rodenberg started doing home visits where she interviewed the families who want to adopt from a rescue. Then, for two years she volunteered as the rescue’s medical director. Still, she wanted to do more. In 2012, after long discussions with her family, she decided to open her home as a foster home for neglected, abused, and abandoned labs. “It was a hard decision because at that time my daughter was only five years old, and we were obviously concerned about bringing strange, frightened dogs into our home. We also had two, seven-year-old labs of our own,” she recalled. “I had many sleepless nights prior to getting our first foster.” Fostering the dogs Fifty-eight dogs later, Rodenberg is more committed to fostering dogs than ever. And she’s not shy about sharing the many reasons behind her dedication to these animals. First, a dog’s love knows no boundaries. Like humans, not all dogs trust people right away – especially rescue dogs that have experienced abuse and neglect. Yet, in spite of what they’ve gone through, they still crave safety and human attention. Rodenberg has learned the importance of patience and staying calm in stressful situations. “You have to be willing to step back and let them learn and trust at their pace – not yours,” she said. “It takes an immense amount of patience to handle some of these dogs.” At the same time, she knows that stressful situations can occur when you’re working with rescue animals, and it’s important to stay calm. “I have been in the middle of two dogs going at it, and I’ve had to break up several fights,” she said. “It doesn’t help to freak out. I learned that if you stay calm, they’re calm. Animals take their cues from those who are handling them.” Win ter 2 015

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Fostering dogs also is a great way to make friends, according to Rodenberg, mainly because you share a common interest. “When you see the same people every week, you say hello and really get to know them,” she said. “I have met some of my greatest friends through rescue.” Rodenberg is quick to point out that being a dog volunteer has taught her a lot about the value of work/life balance. “I work as your executive director seven days a week, and I spend my spare time advocating for these animals,” she explained. “I work to support my lifestyle, and I volunteer to enhance my lifestyle. Dogs live in the moment, and it’s nice to take a step back and live in the moment with them.”

Kelly and her family.

It’s also nice to give back. “Giving a voice to those who can’t speak for themselves is a powerful feeling,” Rodenberg said. “Raising awareness for an issue you care about, and perhaps teaching someone in the process, is wonderful. At the end of the day, I feel accomplished because I know I actually helped.” Beyond that, Rodenberg likes being a role model for others. After years of volunteering, she now acts as a mentor to new foster families and also to her daughter who, even at a young age, is an advocate for rescuing and adopting dogs. Today, while Rodenberg admits that she still has plenty to learn about dog behavior and training, every day she strives to be a better volunteer. But, like most things, hard work pays off. She continues to volunteer with MLRR, as well as Hoof Woof and Meow, and now she can even walk into an animal shelter. She still cries whenever a foster dog leaves her home, but she takes pride in the fact that the dog has a forever family and home. “When my foster dog walks out my front door, I realize this is what I’m here for,” she said. “As a volunteer, I rescue dogs. But in the end, they really rescue me.” 34

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JAKE & ELIZABETH RASOR

When Jake and Elizabeth Rasor got married three years ago, they both knew that frying chicken and driving tractors would be in their future. Jake is a KFC franchisee based in Greenwood, S.C., who owns and operates 23 KFC restaurants in South Carolina and Georgia. Elizabeth, on the other hand, helps her five siblings run an agri-tourism business from Denver Downs Farm in Anderson, S.C., a farm that has been in her family since 1869. This past fall, Jake and Elizabeth sponsored the Denver Downs Farm Annual Corn Maze & Pumpkin Patch, which allows visitors to experience farm living firsthand. This year, the maze celebrated the 75th anniversary of Kentucky Fried Chicken and featured a patriotic theme that included Colonel Sanders, KFC, and Denver Downs. From the air, the maze looked like a bucket of chicken with stars and stripes. While the maze is set up for families and other visitors, several weekends are assigned to special events. For instance, on Veterans Weekend, all veterans benefited from free admission to the maze, and some local veterans were honored for their service. “We gave them a certificate of appreciation, they got up on the stage, and we played patriotic music,” Elizabeth said. First responders, EMS workers, and members of the local fire department and sheriff ’s department were honored at the same time. In addition to honoring vets, they waived admission for grandparents on Grandparents Day, and school groups benefited from a discounted rate during the week. “This benefits a lot of children who would not normally see a farm operation,” Elizabeth said. “It’s educational, and it gets people out in the fresh air. We take a lot of pride in helping families have a nice, healthy day together enjoying the outdoors.” The partnership between agriculture and tourism makes it possible for Elizabeth and her family to share the rich history of the farm while also providing an opportunity for people to learn about the role of agriculture in their daily lives. Visitors to the 10-acre corn maze follow a map that guides them to numbers located throughout the property. To find their way, they must answer trivia questions, which this year were based on KFC and patriotism. Other activities offer opportunities to interact with the farm animals. This year, two piglets were born during the period when the corn maze was up and running, and one goat gave birth as well. A Living History Weekend featured World War II and Civil War re-enactors who set up camp on a 100-acre field on the farm. In addition to watching the re-enactors in action, children were able to interact with them. A special Education Day was established to make this possible. Denver Downs Farm, which has been in Elizabeth’s family for generations, is listed on the National Register of Historic Places. It was established as a cotton farm, transitioned to a dairy farm, and today is a working farm devoted to agri-tourism. The 900acre farm, which has been welcoming school children and other visitors for many years, is located on Highway 87, just one mile north of I-85 between Anderson and Clemson, S.C. www. akf c f . c o m

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Entrepreneurs at heart Elizabeth and Jake are both entrepreneurs at heart. Prior to marrying Jake and getting involved with his work as a franchisee, Elizabeth founded Ever-Green Recycling, which specializes in customized commercial recycling programs that fit the needs of individual offices, restaurants, hotels, and medical facilities. In 2009, Ever-Green Recycling was honored with a Business of Integrity Award from the Better Business Bureau of Upstate South Carolina for its outstanding contributions to the community. Today, Elizabeth speaks at recycling conferences and women-in-business events, and she draws on her farming heritage to spread the word about the importance of being a The corn maze at Denver Downs Farm. good steward of the environment. She likes to joke that she went “from trash to fast food,” but is quick to add speaks to high school and college students about the benefits of that she’s having a great time working with her husband in the entrepreneurship and encourages them to pursue exciting caKFC business. reers. “It’s really a lot of fun,” she said. “I think about when I was In addition to their work with the corn maze at Denver in their shoes twenty years ago. I want to encourage them to do Downs Farm, Jake and Elizabeth lend their support to differmany things in their life. I want them to know that if they work ent charities, such as Junior Achievement. In this role, Elizabeth hard and plan well, good things will happen.”

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KFC Foundation launches new “KFC Family Fund”: Helping our family in times of need By Krista Snider Already known for its commitment to helping KFC restaurant employees through educational endeavors, the Kentucky Fried Chicken Foundation has launched the new “KFC Family Fund” to provide financial assistance to KFC Restaurant employees in times of personal crisis. The KFC Family Fund provides temporary, limited financial relief to all restaurant employees in good standing at all KFC U.S. restaurants. Program resources are designated for crisis situations including fire, natural disasters, funeral costs, serious illness, personal injury (away from work), theft or loss of essential personal property, military deployment and other financial hardships. While money can’t eliminate the sorrow, it can certainly eliminate some of the added stress that often accompanies it. The Foundation, an independent non-profit organization, was inspired to create the KFC Family Fund in response to recent tragedies that affected team members. The Fund, which launched Dec. 1, 2015, is a year-round program. More information, including the online application for assistance, can be found at KFCFoundation.org, or in the Foundation’s site area on TeamKFC. Once an application is received, the Foundation confirms that the employee is considered in good standing with an RGM and/or franchisee. Questions may be directed to the Foundation via Foundation@kfc.com, or 800-248-5092.

How it’s funded This new offering is funded outside of the Cole Slaw Donation Program, through which the Foundation provides the REACH Educational Grant and® – High School Equivalency Programs. The KFC Family Fund was created using funds from a previous Foundation disaster relief program, KFC Feeds, that was established to provide KFC meals to members of the public. The Foundation Board of Directors wanted to better align use of those resources with the organization’s mission of taking care of restaurant teams. Unlike the Foundation’s educational assistance programs, the KFC Family Fund is open to all KFC Restaurant employees,

How to get assistance The KFC Family Fund, which launched Dec. 1, 2015, is a yearround program. More information, including the online application for assistance, can be found in the Foundation’s site area on TeamKFC. Once an application is received, the Foundation confirms that the employee is considered in good standing with RGM and/ or franchisee. Questions may be directed to the Foundation via Foundation@kfc.com or 800-248-5092.

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Franchisee Heritage

WE ARE

Family

By Paul Geref fi

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â&#x20AC;&#x153;We Are Familyâ&#x20AC;? was a popular rock song by Sister Sledge in 1979. The hit tune was used as the theme song for a number of sports teams and other entities. It can apply as well to franchisees throughout the KFC system. A strong sense of family is an integral part of the KFC franchisee community. As the KFC business often expands to include family members to carry on the heritage and tradition of the Brand, the franchise community also considers each other as part of an extended family. Whenever and wherever franchisees connect, there is a palpable sense that they are all part of the legacy of Colonel Harland Sanders and remain proud to carry on the tradition of KFC. As the KFC business continues to grow and adapt to changes, so too does the franchise family grow as well. Infusions of additional family members add new lifeblood, passion, and commitment to the heritage started by the Colonel more than 70 years ago. Here are a few of their stories.

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THE BAGSHAW FAMILY Hillsboro, Ohio

The Bagshaw family story is a fun one and, like the Colonel himself, was born in Henryville, Ind. In 1971, Bob and Anne Bagshaw founded Team Bagshaw with a single Kentucky Fried Chicken franchise. Bob worked at the Ford Motor factory in Louisville and Anne, who had emigrated from Norway, was a bank teller. The couple met when Bob was stationed in France while in the Air Force. Their story began a bit earlier. In 1956, at the age of 66, Colonel Sanders began franchising his famous Kentucky Fried Chicken. The Bagshaws lived in the same town that the Colonel was from, and a place the Colonel frequently revisited. During those visits, the Colonel would recruit franchisees for the KFC business. On one of those occasions, a fundraiser to send a local band to Mardi Gras, the Bagshaws and their family met the Colonel. Henryville is where Bob and Anne created their vision for Team Bagshaw. Bob already had friends that were in the KFC business, such as TJ and Lavonne White, who were franchisees in Lawrenceburg, Ind., and running a very successful franchise. Along with friend Marvin Payne, Bob traveled to Louisville to learn about the potential of a KFC franchise. Subsequently, they

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Bob and Anne Bagshaw with the Colonel, circa 1971.

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opened a KFC in Jackson, Ohio in December 1971 and another in Hillsboro, Ohio in May 1972. The Bagshaw’s young children, Jeanine, 9, and Bruce, 7, helped grow the family business. “For the first few years there were many times that I would work the cash register, mom packed the orders, Bruce stood on a crate to bread the chicken while dad cooked on the pressure cooker pots,” Jeanine says. Both Jeanine and Bruce continued to work in the restaurant throughout high school. Back then, says Bruce, most everything in the restaurant was done by hand. Cutting the vegetables for coleslaw, boiling and peeling potatoes for potato salad, rolling the dough for biscuits, and making gravy. “Every time we would sift the flour we would sneeze,” Bruce remembers. In 1976, Keith Chambers joined Bob and Anne, and served as the general manager, helping to grow Team Bagshaw to 10 restaurants before Jeanine and Bruce returned from college. All three have met the Colonel several times and, in fact, when they purchased a restaurant from John Dahlstorm the deal also included one of the Colonel’s trademark white suits, which they display at their Restaurant Support Office. Since that time, Team Bagshaw has expanded their restaurant brands to include Taco Bell, Long John Silvers, and A&W. During their 45-year journey, it has grown to 23 restaurants, throughout Ohio and Northern Kentucky. Bob and Anne retired in 2012 and Jeanine and Bruce currently lead Team Bagshaw. Jeanine focuses on operations and administrative issues, while Bruce handles maintenance, facilities, growth, and vendor relationships. The Bagshaws have been involved in various associations and committee’s for KFC.

Jeanine was president of the Great Lakes KFC Franchisee Association and Bruce of the Southeastern KFC Franchisee Association. They both believe the KFC franchisee family’s strength is due to so many franchisees taking their turn in serving and growing the franchise community. “I love the people and I love the food,” Jeanine says. “We are blessed to have an

amazing team to work with. Most of our RGMs have been with us 10-20 years, and this year we celebrated RGM Dave Prater for 35 years with Team Bagshaw. It is so much fun when we have meetings; we’ve all grown up together and it’s one big family.” Bruce adds that forming friendships with team members and watching them

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Kelly were doing. Now, each Thanksgiving morning their family prepares KFC meals for members of their hometown community, donating 400 meals this year. “This is a very small, yet emotionally significant gift. Our kids and spouses [Jeff and Laura] all join in on preparing and delivering these meals,” Jeanine says. “It touches our hearts each year, knowing that our family helped make a small difference on the Thanksgiving Holiday.” The Bagshaws remain proud of the rich heritage of KFC and are excited to carry on the legacy of Colonel Sanders. A third generation of Bagshaws now are entering the business and they also are excited to carry the Brand into the future. Jeanine’s children include son Rob Holt, who works in facilities/maintenance and ops; daughter Jordan Anne Phillips is the culture, recognition, and events coordinator; and sonin-law Seth Phillips works in ops. Bruce’s son, Blake Bagshaw, works in advertising, marketing, and ops. “Don’t start here, end here,” Jeanine once told her children. But they love the business and continue to work hard at it. It’s important for legacy brands like KFC to stay exciting and relevant and new generations add to that. “It’s a great time to be part of the KFC Brand. We have the legacy and the history, but we’ve also got the future,” Jeanine says. “I couldn’t be more excited than where we are right now.”

Top: A young Bruce Bagshaw with the Colonel. Center: Young Jeanine Bagshaw with the Colonel. Bottom: Team Bagshaw today.

THE KOHL FAMILY Guntersville, Ala.

move forward in life is always rewarding. “We encourage team members to grow and as a company we like to promote from within,” Bruce says. “Our success is the result of our team.” The family theme spreads through the Bagshaw’s clan. “Jeanine and I have been doing this our whole lives,” says Bruce, and we have lots of relatives that are in KFC because of my parents. The Wheeler family in London, Ohio and Teresa and Bill Kelly in Waverly, Ohio are our cousins. I guess you could say it’s a ‘family thing.’” Four years ago, the Bagshaw Clan decided to duplicate a Thanksgiving tradition of “giving back” that Teresa and Bill 42

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Things were fun when Larue Kohl first entered the KFC business. When his father, Jack Kohl, bought an existing KFC restaurant in Cullman, Ala., in 1968, Larue hitchhiked there from New Orleans to observe the operation first-hand. What he saw that most impressed him was simple. Everyone, from the cooks to the customers, seemed to be having fun. He could tell by the smiles on all of their faces. According to Kohl, the entire process was like a carefully orchestrated symphony. From the order point to the kitchen and back again to the customer, the progression of events was framed by smiles and good nature. Another satisfied customer got the food they were craving. Even though the lines of hungry customers often were long, everyone seemed happy. “Back in those days, everything about our business wowed the customer,” Kohl says. “Our employees were the ‘rock stars’ of the town because everybody loved Kentucky Fried Chicken. We all had fun.” Kohl especially enjoyed walking around town in a white shirt and black “Colonel” tie as a sort of mobile billboard to let people know about KFC. The strategy worked well. In addition, operations were much simpler then. The customers www. akf c f . c o m

loved the KFC product and the staff, the menu was simple, and they made a great living. In 1971, Jack Kohl bought Chuck’s Smoke House barbeque in Guntersville, Ala., and added the KFC product. Larue went to work for him on March 6, 1972. The company soon evolved from selling the Colonel’s recipe in existing restaurants to only free-standing restaurants operated by franchisees. Larue was happy to be part of that. He bought an existing restaurant in Boaz, Ala., in 1973 and helped his father open a KFC in Hartselle, Ala., in 1974. Larue eventually bought the Guntersville restaurant in 1982, and built another one in Arab, Ala., in 1985. He bought the Hartselle KFC from the estate when Jack Kohl died in 2004. Kohl’s sister, Mimi, and her husband, Kent, bought the Cullman restaurant from Jack in 1996 and opened another KFC in Cullman in 2001, which they still own and operate. Jack Kohl served on the NFAC for three years before the NFAC and the NAC were combined forming the NCAC in 1997. Larue has been active outside of restaurant operations as well. He was elected to the Board of the Southeast Region in 1992 representing Alabama, he was the SEKFCFA president in 1998, and served three, three-year terms representing Alabama, Florida, Mississippi, and Louisiana as NCAC Region

Above top: Larue Kohl, Jack Kohl, Blanche Kohl, Jane Kohl, and Colonel Sanders in 1978. Above: Larue Kohl and Wally Hebert receiving Shining Star Awards at the Convention in 2000. Bottom: The Kohl Family, including King Kohl Management Team, KFCC President John Cywinski, and the Band Cowboy Mouth at Convention in New Orleans in 2013. Winter 2 015

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5 rep from 1998 to 2007. He also was president of the AKFCF from July 2012 through June 2013. The family concept is an important component of the KFC system, and this applies wherever one travels throughout the system. “This isn’t just a business, it’s a family,” Larue says. “We all learned from each other and helped each other and we grew fast because of that.” Welcoming employees into the family also is an integral part of the business. “Praise loudly in public and admonish quietly in private” is part of that strategy, says Kohl. That helps employees bond and get to know each other as family. “We’re greeted with open arms wherever we travel and meet other franchisees,” he says. You can go anywhere in the world that there is a KFC restaurant and know you have a friend. One thing that stands out for the Kohl family as franchisees in the “chicken business” is simple. They aren’t really just in the chicken business; they are in the people business. “First franchisee Pete Harman said that long before that was a catch phrase,” Kohl says. “Satisfying the customer and keeping them coming back with quality, service, and cleanliness is the key to success, and doing it the hard way is a big part of the Colonel’s legacy.”

THE MCKENZIE FAMILY Lafayette, Ind.

McKenzie Foods was founded in Lafayette, Ind., in 1965 by Jim Price, who opened two KFC restaurants, according to his grandson, Jim McKenzie, current operator of McKenzie Foods, Inc. Price was 55-years old when he entered the KFC business after retiring from a successful career in the home-building industry. Unfortunately, Price passed away in 1972. After several attempts to hire a good general manager, McKenzie’s mother, Anne McKenzie Goodnight, took over as president and GM of McKenzie Foods in 1980. The company grew to four restaurants in Lafayette over the next 25 years. Two of these locations were new restaurants that Jim and his twin brother, John – both of whom had been homebuilders in the Indianapolis area since 1990 – built. In 2005, Jim McKenzie began to get more involved with the KFC business by helping Anne. In 2008, as part of a business succession plan, he took over as president of McKenzie Foods. Anne continues to be involved as she is the “face” of KFC to many people in the Lafayette area. McKenzie Foods has grown during the past 10 years under Jim’s leadership. The number of restaurants is now up to 10, with locations throughout central Indiana. Jim and Anne are proud of the fact that they have continued what father/grandfather Jim Price started more than 50 years ago, and are sure that he is smiling down on them as they continue his legacy.

Picture of Anne “MawMaw Chicken Nugget” McKenzie Goodnight. 44

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As McKenzie Foods continues to grow and the business remains successful, Jim has begun conversations with his children, nephews, and nieces regarding who would possibly be the fourth generation of KFC franchisees.

Anne and Jim McKenzie. Jim is past president of the Great Lakes Region,and current chair of the AKFCF Finance Committee.

THE JACKSON FAMILY Longview, Wash.

The KFC business is truly a family affair for the Jackson family. Fred Jackson started with KFC in 1975 as a dishwasher in the Harman organization. He worked his way up to manager in 1977, the same year he married his wife, Lisa. She would become a co-manager. The couple worked their way up and Fred became an area coach, while Lisa became a trainer. In 1993, the Jackson’s fulfilled a dream and became franchisees in the Northwest. Their children began working in the KFC business along with them. As their parents did before them, the children started on the bottom and worked their way up. In 1999, son Daniel Jackson and daughter Katie Jackson (now Roberts) began managing a KFC restaurant for Graja Inc., the Jackson family company, based in Longview, Wash. “Having our family in the business offers stability,” Fred says. “We’re part of a bigger family of KFC franchisees and we give each other advice and support.”

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The Jackson’s currently work with co-branded units with KFC/Taco Bell, KFC/Long John Silvers, KFC/A&W Buffet, and KFC-only brands in their operations. They own four restaurants in the Pacific Northwest. The Jackson children have continued to move up the ladder and have been ARLs and now help oversee the entire organization. “We are very hands on and in our stores a lot to oversee operations and training,” Fred says.

The Jackson family.

Currently, Fred is the Northwest Region’s president and on the AKFCF board. In the past, Fred has served on the OEC, as well as president for the local co-ops, when they still had them. For two years, he was an advocate for Washington State to help with the laws to protect the KFC Brand. Given his long history with KFC, Fred sees the movement of the Brand back to its roots as a positive step. “I like the ‘re-Colonelization’ of our Brand,” he says. “KFC National led the way and we are back to our core product. There’s nothing like Original Recipe.”

Contact your ad representative today for more information or to receive your copy of the 2016 Media Kit!

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M E R I T

U p d a t e

Getting Back to the Fundamentals 6

By Michael Kohlman

This past year, KFC has started making big changes. We are getting back to the fundamentals of our business through the “Re-Colonization” of the way we make Original Recipe Chicken. Our advertising is getting attention with the Colonel taking center stage. We’re installing new pack lines. Franchisees are evaluating how many restaurants to remodel. The projects underway in the IT department are just as big. I’d like to update you on a few of them.

Data security Data security may seem about as sexy as your business insurance policy, but it’s just as important. Most KFC presentations on this topic start by pointing out that Greg Creed has identified food safety and data security as the two most potentially damaging risks that Yum! faces. That concern is well founded. Some estimates of the cost of a data breach are as high as $200 per credit card, and we process a lot of credit cards. Many readers have probably also heard about EMV, or “chip & signature” credit cards, and the Oct. 1, 2015 shift in fraud liability from the banks issuing credit cards to retailers. KFCC has a plan to address these issues. However, some background on what thieves are doing may help lay the foundation for an understanding of the strategy KFCC has chosen. There are basically two parts to credit card data theft defined by how the thieves monetize the data, i.e., how they convert stolen data into cash. The first part is the theft of credit card data from networked computers, POS systems, or credit card readers that is usually then sold to other thieves. The second part is credit card 48

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fraud where the thieves buying the data use it to create clones of cards, which they use to buy things that can be sold for cash – often at a pawn shop. The theft of our customers’ credit card data from KFC computers, POS systems, or credit card readers is the threat we need to fear. This is the kind of event that makes national news and causes huge expenses in terms of forensic examinations; notification of customers; paying for credit card monitoring for affected customers; card replacement costs; and the biggest cost, the loss of customer loyalty. Data security experts estimate that 31 percent of customers terminate their relationship as a result of a breach. At present, when a customer swipes his/her credit card at the counter of a KFC restaurant, the credit card terminal sends the data to the POS terminal, which sends it to the back-of-house-computer, which then sends the data to the bank for approval. PCI (Payment Card Industry) compliance does not require that this data be encrypted unless it is stored. So, while KFC systems meet PCI compliance standards, data is moving from device to device and can be intercepted by software designed by thieves (malware). The malware can get into your system in a variety of ways, from attachments to emails sent to your restaurant (called phishing), websites visited by your managers, or even from someone you’ve hired to do maintenance on your equipment. KFCC’s solution to this threat is called “point-to-point-encryption.” Encryption is a method by which data is protected by converting it into a virtually unbreakable code. With point-to-point-encryption, the credit card terminal encrypts the credit card data as it is swiped, and sends the encrypted data directly to the bank

for approval. The bank then converts the credit card number into a set of random numbers called a “token,” which is then sent to the back-of-house-computer in your restaurant and stored. The credit card data is never stored in our system and never moves through our system. This solution eliminates the potential for a huge financial loss caused by credit card data theft, but like your business insurance, it isn’t free. About 2,500 restaurants in the KFC system currently have either the Ingenico IPP350 or Ingenico ISC250 credit card terminals required to implement point-to-point encryption. The remaining 1,350 restaurants will need to purchase those terminals. The cost for three terminals, two on the front counter and one at the drive-through, is estimated to be under $1,500 per restaurant. However, if you need other network equipment, the cost will be greater. There also is a $60-per-restaurant, one-time software fee for all franchisees, and an ongoing $10-per-month encryption service fee per restaurant that will be billed by your credit card processor and be part of your monthly statement from them. This safeguard will be rolled out starting in the first quarter of 2016, and should be completed in the second quarter. Recall the second part of credit card data theft described above is credit card fraud. The new EMV, or “chip & signature” cards, are designed to prevent credit card fraud and your new Ingenico terminals will be able to read these cards when KFC adds that support. However, KFC is not going to rush to add the EMV support to our credit card terminals. Just like franchisees, thieves understand the importance of margin. So, if they’ve invested up to $100 per cloned credit card that has a limited number of uses before the rightful www. akf c f . c o m

owner discovers the theft and cancels the card, they want to make those purchases have the highest margin possible. They are going to buy consumer electronics and other high-ticket items that they can pawn for the most money. Bringing a 16-piece bucket of chicken into the local pawn shop just doesn’t pay.* It’s also important to note that there is going to be a learning curve that consumers will have to go through on how to use EMV cards. Hence, KFC will let other retailers train the public on how to use EMV cards, then roll it out to our restaurants some time in Q3 of 2016.

Menu 2.0 Much of the system already has rolled out Menu 2.0, which changes the way the POS screens in your restaurants are designed and the way your team navigates from screen to screen. It also introduces full menu item descriptions and displays recipe builds to make modifying orders easier for your team members at the front counter. There also are less obvious improvements to order entry, data optimization, and a “cleanup” of our database. However, the most significant part of the Menu 2.0 rollout – and one that you may not know about – is that it lays the foundation for future digital ordering and “cloudbased” back-of-house solutions. Right now, your POS data resides on the back-of-house computer and is

uploaded each night after you run your end of day reports. The next morning, you can see your results by logging onto Team KFC, OMR, downloading HTML files from a secure FTP site, or running some Microstrategy reports. Cloud-based solutions would store operating data “in the cloud” as it happens; in other words realtime data (or near-real-time data) would be available on a server that you can access from any computer, tablet, or smartphone at any time. KFC is testing off-the-shelf, cloudbased solutions from Hot Schedules to perform various Merit functions. For instance, Hot Schedules’ labor scheduling program is in testing, as is Enterprise Back Office, which performs many of the core functions of Merit. Other items under consideration are Digital Log Book, an online version of the “Redbooks” that are so ubiquitous in our restaurants, and Platform, a digital dashboard that would feed real-time operating data to your smartphone. It’s important to note that the intention is not to simply have these tools replace Merit. These solutions would carry a cost to franchisees greater than the current cost of Merit, but may make sense for franchisees to invest in if they provide a return on that investment. We’ll all know more as the results of these tests come in.

Product mix While a significant amount of the Merit-related efforts of the KFC Technology team are focused on new cloud-based solutions, there still is work being done on the existing Merit system. One development coming out of that work is a new report that franchisees may find valuable. It is a simplified product mix report that includes the quantity sold, prices, and theoretical food cost. A product mix is a fundamental report for any POS system and Merit always has

been able to generate product mix reports. However, some franchisees (like me) have been frustrated by the level of detail generated by the Merit product mix reports. They broke sales down by every possible permutation of chicken flavor and chicken pieces. So, if you were interested in seeing how many #2 two pc. Chicken Combos you sold, it would be reported as white, dark, or mixed, and then by flavors of OR, ETC, KGC, or mix, and so you end up having to potentially add 12 lines of a report to find your answer. The new product mix condenses all that detail into one line, and so a multi-page report becomes a onepager that reads more like your menu. The really big win with this report is that it also includes the theoretical food cost for each menu item. The theoretical food cost is based on the Merit menu builds, and the current ingredient prices in your restaurant. So, note that this is not an accounting number based on the value of the starting inventory, the cost of your purchases, and a first-in/first-out inventory depletion. Rather, it is simply a snapshot of the current cost of each item. However, the cost in combination with the prices and number sold allow you to investigate how price changes would impact your food and paper cost given a static product mix. If you are using the new RMS pricing tool, the assumption of a static product mix might be fairly good, as one objective of the RMS suggested pricing is to make price increases “stick” and not just decrease the number of items sold. This new product mix report can be found in OSM tools under Reports and is fittingly called “Product Mix.” There are Daily, Period-To-Date, and Week-ToDate reports, all downloadable as Excel spreadsheets. Note also that these reports are available for previous dates on the secure FTP site that warehouses your Merit reports.

*Note: There has been an increase in one type of credit card fraud at KFC restaurants that does pay and that’s the purchase of high dollar amounts of gift cards (several hundred dollars) in a single transaction using a cloned card. Gift cards are easy for thieves to sell. The good news is that these kinds of purchases stick out, and when they happen there is an easy method to insure that they aren’t fraudulent. Cloned cards used by thieves have a credit card number on the magnetic strip that doesn’t match what is printed on the card. So, if a guest comes into one of your restaurants and wants to buy several hundred dollars of gift cards with a credit card, make certain your team knows to match the last 4 digits printed on the card to the last 4 digits on the receipt. If they match, there is little chance that you are being robbed.

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Good News to Share as we Head Into 2016 6

By Jody Luihn

1/7/16 PM *Period 12 Pepsi Volume was +11.4% over 2014. Year-to-date Pepsi Volume up +19.6% over3:27 2014.

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This has been an historic year for beverages at KFC.* Drinks per Tran Year to date is .83, which is the highest drinks per tran in the Yum! system, and the highest at KFC in more than a decade. Obviously, this is the result of two big initiatives, the $5 Fill-ups and the introduction of Dole Classic Lemonade, which continue to provide strength to our beverage volume. Year-to-date syrup volume is up 19.6 percent, more than 1 million gallons higher than last year. The new menu boards also have had a positive effect on drink sales. Additionally, I am happy to report that in period 12, both ½-gallon jugs and individual servings of Dole Classic Lemonade remain steady following summer:

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As always, we

ENCOURAGE you to put strong EMPHASIS on

BEVERAGES in your restaurants.

• ½-gallon jugs = 6 Weekly Per Restaurant Average • Individual 20oz. servings = 63 Weekly Per Restaurant Average • Full year Dole Lemonade Volume forecasted to be more than 700,000 gallons.

Focusing on next year, we will be making plans to try and meet or exceed 2015 beverage sales by supporting each calendar promotion with appropriate marketing materials and making further decisions regarding a special proprietary Tea Blend for the KFC system. The goal is to upgrade the quality of our brewed iced tea in preparations for a strong introduction of brewed iced tea as a system. As always, we encourage you to put strong emphasis on beverages in your restaurants, doing proper maintenance, selling the right brands, creating a culture of suggesting beverages, and refreshing your equipment when it is eligible for the best drink quality.

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O E C

What Did We Accomplish In 2015? 6

By Bryan Robinson, Operations Excellence Committee Chair

As you all KNOW, Hello, AKFCF! By now I’m sure you are looking forward to another world-class Convention. My hope is that we all are enjoying continued sales momentum. As I sit here today, I find myself reflecting on the many accomplishments 2015 has brought, as well as looking forward to what accomplishments 2016 will bring.

What did we accomplish in 2015? 2015 was a busy year for your OEC. While the majority of our time and efforts were spent refining the ROCC (Restaurant Operations Compliance Check), there were many additional projects being developed and refined to help enable our system to grow and develop.

we are no strangers to

MEASUREMENT programs and 2015 also brought us some SIGNIFICANT changes here as well.

For starters, in the area of training, KFCC – with input provided by the OEC – has officially launched a new curriculum focused on the training and development of all system ARL’s. This one system, cutting-edge training now available on Team KFC, has filled a much-needed void by providing easily accessible instruction on mobile devices to one of our system’s most critical leaders. This nationally awarded training is something you won’t want to miss. It features interactive modules that provide feedback on how the participant’s decisions impact various areas of restaurant and area performance. It finally culminates in an interactive module simulating a ‘day in the life’ of an ARL. It’s truly cutting-edge training for a vital role in our system. This past year, KFCC also brought us the Your KFC Voice (YKFCV) survey. Many OEC members piloted this survey with participation from other system leaders. The YKFCV survey not only provides a restaurant-specific profile of its culture traits, but its data also has shown a direct correlation between a restaurant’s implementation of recognition and training programs to a higher level of employee engagement and VOC success. The 52

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YKFCV survey insights provide an invaluable resource to us all by identifying where each restaurant team’s engagement truly lies. Additionally, the survey details in what areas we are excelling, as well as what areas need improvement. As we all know, highly engaged teams outperform teams whose engagement is not as high. As you all know, we are no strangers to measurement programs and 2015 also brought us some significant changes here as well. In addition to the ROCC, the OEC has been entrusted to oversee our 1-800 guest resolution program. This past year has seen significant changes to the program by empowering Service Check to directly satisfy our upset guests. This has resulted in significant increases in incident closures. While this is great news, there still is work to be done. With social media playing a more significant role in our culture, we cannot be complacent. Therefore, we are actively pursuing new and innovative ways to respond to unsatisfied guests more quickly and efficiently in the future.

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What can we look forward to in 2016? While 2015 was certainly a busy year; there will most definitely be more work to be done in 2016. Make sure to be on the lookout for new and innovative methods of delivering training to our restaurant teams, as well as an overhauled curriculum for Shift Supervisors in the Learning Zone! This much needed training overhaul will most certainly be best in class. We also can look forward to another amazing Best of the Best event at the Hard Rock Hotel in Orlando, to honor our system’s top performers. …And while I’m on the subject, be sure to look for an updated, simplified, and objective criteria for 2017’s event! 2016 also will bring a one system Balanced Scorecard. There finally will be a consistent measurement tool that features a consistent set of metrics with a consistent set of targets so we can all benchmark against the system, a DMA, an organization, and even your individual area. This new measurement program will be monitored

by your OEC, and future recommendations will be made to ensure its relevance as system’s needs change. Another change to look for in 2016 will be an improved focus on a vital few priorities as the year progresses. This enhanced focus will enable a more efficient system of vetting initiatives by allowing the OEC’s time and talents to be better utilized in 2016 and beyond. Finally, I’d like to thank all the members of the OEC, both present and past, for their service to the great brand. I’d also like to ask each and every one of you while at Convention – whether you are perusing the vendor floor, hanging out during a break, or just enjoying some fellowship during lunch or dinner – please take a moment to seek out your OEC representatives and thank them for their volunteerism. Their time and talents contribute to a better system for all of us. Thank you for the opportunity to serve. We are looking forward to our best year yet in 2016!

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B u s i n e s s

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A KFCF Q uar te rl y

R S C S

M e m b e r

P ro g ra m s

Pre-Convention Notes 6

By Lainie Yarmuth

RSCS Member Programs is excited to be a part of the 2016 AKFCF Convention with our “Grow Your Savings” alley, as well as at least one new promotional element from the RSCS Member Programs Team, such as in-room “Welcome Kits” sponsored by AT&T. By partnering with suppliers that bring value to the system and support the Conventions, we are able to provide the extra promotional items to accentuate your Convention experience. We also are excited to welcome a few new suppliers for the Grow Your Savings alley in 2016! The RSCS Member Programs Team is thrilled to announce a Member Programs partnership with RTI for the first time at the 2016 AKFCF Convention. RTI is a long-standing oil distributor for the KFC system and recently signed an agreement to partner with RSCS as an Oil Equipment Supplier. The RTI oil management system and the associated technology measures and monitors oil usage to increase food quality and consistency. RSCS worked with RTI to define new pricing for the monthly service, as well as to develop an Operator Agreement with more favorable terms and conditions. Some of the updates are a new flat fee for monthly service, which equates

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to $176,000 annual system savings for current operators leveraging the service. New renewal agreements also have been negotiated with rates that are an average 33 percent lower than the current agreement! More favorable terms for early terminations have been negotiated as well for new restaurants on the program. RTI’s oil management solution provides a turnkey system that takes care of oil delivery, storage, handling, and disposal. The complete system comes with all the hardware, software, installation, training, and support services you need to easily automate oil management. The RSCS Energy Rebate Program launched in October 2015 and will be highlighted at AKFCF Convention. RSCS has partnered with Schneider Electric to capture the rebates and incentives offered to our members who purchase energy-efficient equipment. RSCS works alongside Schneider Electric to determine which purchases are eligible, file for the rebates, and secure the rebate funds for operators enrolled in the program. Energy rebates are based on the utility company’s available funds, rebate programs, and restaurant location, so not every equipment purchase qualifies with every utility company.

Outside of the RSCS Energy Rebate Program, the rebate application process can be tedious for an individual operator, but even more so for an operator with multiple locations. Leveraging the RSCS Energy Rebate program’s online system and Schneider’s expertise and relationship with utilities, the program allows operators to easily tap into the utility company’s funds. If you haven’t already signed up to take advantage of money that may be available for your locations, sign up electronically via the RSCS Digital Directory: www.rscs.com/memberprograms.

Grow Your Savings Deal Alert! Don’t forget to replenish your business cards for Convention with the Staples Easy Print website with updated KFC graphics. The business card shown is $23.75/500 cards.

www. akf c f . c o m

There are other versions if you want to ensure your busines card gets noticed! Visit the Digital Directory for all Staples product info www.rscs.com/memberprograms or for the business cards visit https:// www.stapleseasyprint.com/Account/ Register and enter RSCS as the company name when registering. As we wrap up 2015, we would like to look back on our progress and the Operator Value the Member Programs team brought to the system this year. Here are a few highlights that we think truly helped make a difference: • Completely updated our image and marketing materials to ensure that all communication is relevant and timely. Sending our monthly emails with “What’s New with Member Programs,” “Savings Spotlight” and “Vendor of the Month” allows a consistent platform to communicate new or

updated programs and offerings from our suppliers. • Launched “RSCS Employee Discounts” to bring an estimated $5 million annual system savings to employees. • Updated several operator legal agreements in most contracts to ensure favorable terms and conditions, and placed the agreements on the Digital Directory for your review in the following categories: 1. Waste Agreements 2. Brinks Smart Safes 3. Cintas 4. Payroll Service 5. Shoe Suppliers

Bright Ideas?

We always are searching for new ways to help operators and employees to Grow Your Savings. If you have any ideas, big or small, please send them to memberprograms@rscs.com for review; we love to Grow Your Savings!

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A KFCF Q uar te rl y

F i n a n c e

C o m m i t t e e

Re p o rt

Looking Forward to a Great Year With the AKFCF 6

By Jim McKenzie, Finance Committee Chair

First of all, I would like to introduce myself. My name is Jim McKenzie and I am a franchisee from central Indiana – McKenzie Foods owns and operates 10 KFC restaurants. I am a third-generation franchisee, following in my mother and grandfather’s footsteps. I am married to my wonderful wife, Sarah, and father to three awesome daughters: Taylor, Ali, and Samantha. I was asked to serve as chairman of the AKFCF Finance Committee and gladly accepted, knowing that I ALWAYS gain more when serving than I am ever asked to give. I previously served the Great Lakes Region as president, serving on the Executive Committee from 2011 through 2014. I graduated from Purdue University with an engineering degree and from the University of Chicago with an MBA. The Finance Committee consists of myself and four others: Greg Atwell, Keith Cole (AKFCF treasurer), Dale Black, and Justin Stewart. Debbie Newton and Kelly Rodenberg both provide invaluable support for us. We are fortunate to have such capable people! The committee acts as the “eyes” of the franchisee members in all budgetary matters. While the committee does not have approval authority over Association spending decisions, we do influence the AKFCF Executive Committee and Board of Directors on the appropriateness and normalcy of such decisions. 58

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As chairman, I COMMIT to understand the AKFCF ANNUAL

BUDGET in detail, and I am confident that EVERY DOLLAR SPENT supports the AKFCF and OUR MEMBERS.

As chairman, I commit to understand the AKFCF annual budget in detail, and I am confident that every dollar spent supports the AKFCF and our members. As time unfolds and priorities change, I commit to making sure our Executive Committee and Board members are well informed and understand the financial implications that come with every decision. I commit to use the collective knowledge and experience of our committee members to best serve our franchisee members. As I look at 2015 and see the accomplishments the AKFCF has made for franchisees, I can say that our collective monies are serving us well as an Association and as franchisees! Here is a brief list of these accomplishments: • Planned and hosted a very informative, entertaining, and pivotal National convention. • Developed and started implementation of a mentoring program at the regional level, assuring that we will have continued leadership in the future.

• Supported significant influence in Washington, D.C. on many issues directly impacting our businesses. • Successfully negotiated and helped construct the Acceleration Agreement for all franchisees. • Continued support of a thorough and detailed archiving vault of pertinent AKFCF business documents. • Developed or assisted in the development of pertinent training and educational resources available to all franchise members. I look forward to a great year with the AKFCF Executive Committee and to serving our members well. I encourage all of you to take advantage of every benefit your membership affords you … and if the opportunity comes your way, to serve in some capacity. I’d like to conclude by thanking Keith Cole for asking me to chair this committee and for all of those who volunteer to serve with the AKFCF in some capacity. www. akf c f . c o m

Regional Short

Formalizing the Process 6 By Kevin Schlutz, Upper Midwest Regional Secretary

Experienced OFFICERS,

DIRECTORS, and REPRESENTA-

TIVES are volunteering their TIME, WISDOM, and EXPERTISE For more than four decades, each generation of Upper Midwest Franchisee leaders has carefully brought along the succeeding generation. Typically, the young volunteers begin by attending advertising co-ops; then they work as co-op presidents, committee members, and state directors on the Regional board before moving on to their first national committee where they learn to build know-how and confidence for the next step. Before long, they are taking the reins as Regional officers and AKFCF Board members and looking for their own person to nurture for the future. While we have historical proof that this process has worked well, considering the long history of leadership provided from the Upper Midwest Region, that doesn’t in itself ensure that new leaders will just happen. With retirements, restaurant closings, and consolidation, there are fewer people to fill those positions, and our people seem to have more on their plates to manage in our busy world. We already have seen an appreciable gap between one generation of leaders wanting to slow down and the next being ready to serve. Seeing this need, the Leadership Development Committee of the AKFCF, with the incredible help of Prof. Denise Cumberland, has developed a more formal process of mentoring that will no doubt prove to be instrumental in continuing to develop great leadership at all levels of the Region and the AKFCF. Every AKFCF Region has been going through the process this year of creating a mentoring manual, developing a bench plan, specific forms and processes to use; determining

for those who will DEVELOP into the next

LEADERS for the

Region and the AKFCF.

who will be their Mentor Coordinator; who their mentor/mentee pairs would be; and receiving training to understand this proven method of bonding a mentor and mentee through the development process – a process that benefits the mentor as well as the mentee. Just another plug here for the Upper Midwest as the Bench Plan form being used across the AKFCF was developed by AKFCF Education Chair and Upper Midwest Past President Justin Stewart. At the end of the Super Regional fall meeting this past October in Denver, the Upper Midwest Board, including newly elected officers, directors and representatives, spent several hours with Prof. Cumberland. In that meeting, they gained valuable insights on the mentor/mentee relationship, proven mentoring methods and styles, and they developed their own key processes for how the Region would move forward. Some of these insights are as follows: • A Mentor Guidebook should be provided to each mentor/mentee pair for the upcoming term. • Mentor/mentee contracts which spell out the expectations will be developed. • Mentor Coordinator will hold a call with mentors prior to each board meeting to gain info to give a Leadership update to the board. • The mentor update will be included for up to 20 minutes on every board agenda.

• The Bench Plan will be reviewed and updated at each board meeting and a vote taken if necessary. • There will be a mentor/mentee breakfast sponsored by the Region at each meeting. • Gift cards will be provided to each mentor/mentee pair to allow for coffee or dinner. • Every two years, the Mentor Coordinator will change to the new Immediate Past President. • Job testimonials about what serving as a volunteer for the Region has meant to the mentors will be published. • Prof. Cumberland will continue to evaluate the program and provide feedback. Immediate Past President Bob Clawson is taking over from interim Mentor Coordinator Terry Moffit as the Region moves forward. Currently, there are seven formal mentor/mentee pairs in the Region. Experienced officers, directors, and representatives are volunteering their time, wisdom, and expertise for those who will develop into the next leaders for the Region and the AKFCF. Formalizing this process in the Upper Midwest and across the AKFCF and other Regions will no doubt be rewarding for both the mentors and mentees, and ensure that there will be no shortage of capable leaders in the years to come. Winter 2 015

A KFCF Q uar te rl y

Executive Director Update

Where Does the Time Go? 6

By Kelly Rodenberg

Each year, it seems like everything gets busier and busier. However, each year I realize more and more what matters in life. Relationships matter. I am amazed by the sheer number of people to whom I have access. Of course, sometimes I am reminded of all the people who have access to me! Not to worry; it is a good problem to have. I can assure you one thing: I will never catch up. I appreciate the professional relationships, my circle of friends, and the smiles and laughs that all of you share with me. We are all on this crazy ride together. Since January, we have made great strides within the AKFCF, yet we still have much work cut out for us. Here is a look back at the events of 2015 within our system, and for fun, our country in general. February 2-5 – The Annual Convention took place at Caesars Palace in Las Vegas, Nev. Attendance was higher than it has been in more than five years with 2,173 attendees. More than 370 franchisee organizations were represented. AKFCF partnered for success with KFCC to bring the Brand Turnaround to life. We heard the details of the proposal from our leadership partners over a period of four days to prepare for the vote. Elvis did leave the building after the Final Night Gala. February 23 – The deadline for the Acceleration Agreement ballots to be returned. The agreement passed 60

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As we look

TOWARD our ANNUAL CONVENTION in

ATLANTA, I continue to be HUMBLED by the AMAZING JOURNEY I have had this year. with a 98 percent return rate of votes (99.6 percent of the restaurants). February 26 – Marijuana use and the possession of up to two ounces of the drug becomes legal in Washington, D.C. March 2 – The New York Times reports that, during her time as Secretary of State, Hillary Clinton was using her personal email for official business. House Republicans were aware of the email account in 2014. March 13-14 – AKFCF initiates the first regional mentor program. It was held by the AKFCF Leadership Development Committee in Chicago. Representatives from the AKFCF Regions, RSCS, OEC, and NCAC were in attendance. Denise M. Cumberland, Ph.D., assistant professor of Organizational Leadership and Learning, College of Education and Human Development at the University of Louisville was hired to facilitate the two-day program. This program helped create commitment among the Regions and assisted with the development of mentoring guidebooks, bench plans, job descriptions,

and better communication internally and externally. Denise has since been presenting workshops at each of the regional meetings. Regarding our continuing focus on leadership within the Association, we are instituting some new initiatives with our continuing and newly elected leaders that we think will help them transition more effectively into their roles and hopefully lay out some clearer “pathways” for those of you interested in getting more involved in AKFCF. This is not an easy task, as it takes into account individual differences in learning and comfort levels. April 24 – During an interview with ABC, former Olympian and reality star Bruce Jenner tells Diane Sawyer, “Yes, for all intents and purposes, I am a woman.” May 26-28 – AKFCF Board of Directors held its spring meeting in Scottsdale, Ariz. The Communications Committee demonstrated an online membership site to the Board that will allow all franchisees to go to a RegOnline website once a year to renew a membership for one region or www. akf c f . c o m

for several different regions to which they belong. This site was approved by the Board and will go live in 2016. June 8-9 – The AKFCF Convention Committee met to begin planning the 2016 Convention in Atlanta. June 26 – The Supreme Court rules 5-4 on same sex marriage, making it legal in all 50 states. July 1 – Chris Fowler took office as AKFCF president. July 14 – NASA’s New Horizon spacecraft completes its first-ever flyby of Pluto, giving researchers an up-close look at the so-called dwarf planet. August 18 – Roger Eaton became CEO of the KFC Division and reports directly to Yum! Brands’ CEO, Greg Creed. Eaton is a restaurant industry veteran with more than 20 years’ experience serving in a series of leadership positions for Yum! and KFC. August 20 – Former President Jimmy Carter announces that his cancer has spread to his brain and that he will be receiving treatment. September 2-5 – The AKFCF held its fall Board Meeting in Memphis, Tenn. For the first time, the KFCC leadership team was asked to attend and to provide an update on the execution of the Acceleration Agreement.

The AKFCF Executive Committee Board, committee chairs and past presidents participated in two, halfday strategic planning sessions facilitated by Harrison Coerver of Coerver and Associates. The group identified five goals to achieve within the next several years. The Executive Committee, plus a few of selected franchisees, will meet in January to develop action plans and report back to the Board at its meeting in February. September 22-28 – Pope Francis becomes the fourth head of the Catholic Church to visit the United States, nearly 50 years after Pope Paul VI made the first visit by a pontiff to the country in October 1965. While in the United States, Pope Francis visits Washington, D.C., speaks at a joint meeting of Congress, addresses the U.N. General Assembly in New York, holds Mass at Madison Square Garden, and attends the Festival of Families in Philadelphia. September 29-30 – The AKFCF fall fly-in took place in September, which gave the GAC, franchisees, and vendors alike an opportunity to visit Washington, D.C. and to discuss the issues important to KFC with legislators on Capitol Hill. Dan Gans and the federal lobbying team arranged a big program for

franchisees that gave them a lot of exposure and a chance to meet the people who directly impact our businesses. The fly-in attendees participated in informative legislative briefings, hosted a reception in the Rayburn House Office Building, and had active rounds of meetings with more than 40 Members of Congress from more than 20 different states. As the year comes to a close, I would like to say that I am blessed to work with a great Executive Committee, Board, committee chairs, staff, and an unbelievable network of KFC franchisees around the country doing their part to help elevate the greatness of our Brand and our Association. I can’t say enough about how proud I am of being a part of the AKFCF and what we do to support our franchisees. As we look toward our Annual Convention in Atlanta, I continue to be humbled by the amazing journey I have had this year, but I couldn’t be happier with – or prouder of – the direction in which AKFCF is moving. Lastly, to those of you reading this, thank you for all you do for AKFCF and the Brand. It continues to be both an honor and a privilege to serve as your executive director. Thank you!

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A KFCF Q uar te rl y

Legal Update

A Culture of Collaboration 6

By Ronald Gardner

As I traveled around the country this fall visiting the Fall Regional meetings, I made it a point to make sure that franchisees spent a few moments reflecting on what we have achieved in the last 18 months. While the road is still long, with certain bumps ahead, I believe firmly in the motivation of success. Given the day-to-day struggles we all face as we continue to turn this Brand around, I find it inspiring to spend a few minutes every now and then looking back over my shoulder at the things we have achieved. When I was hired as the AKFCF general counsel in December 2012, there were a number of extraordinary challenges facing the Brand. Sales had been on a steady downward trend for a number of years, KFCC leadership was foundering, and the prospects for longterm security in the franchiseesâ&#x20AC;&#x2122; relationship with the franchisor seemed dim. What a difference a couple of years can make. Working hand-in-hand with NCAC, the AKFCF embarked on a journey, beginning with the authorization for a system-wide econometrics study that resulted in the historic Acceleration Agreement. Many of our long-standing issues were resolved through that long, and sometimes painful, but extraordinarily rewarding, process. First and perhaps foremost, we secured for ourselves, our children, and many of their children, the right to retain the 76(5p) Agreement for legacy franchisees until at least 2050. That result resolved the uncertainty that was facing us in June 2017 with the 62

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Take a deep BREATH and look at the last few

PARAGRAPHS that I have written. IMAGINE how long it has been since this much

PROGRESS has been made on so many ISSUES in such a short period of TIME.

expiration of the Settlement Agreement from 2008. Perhaps there will be no longer lasting impact to the Acceleration Agreement than that achievement. But that is far from everything that we managed to accomplish. We resolved long-standing and vexatious issues related to family transfer rights, making it easier for parents to pass their businesses on to their children, while simultaneously giving our KFCC partners the security they needed that the restaurants would remain financially viable and able to function. We embarked on a wholesale revision of the store inspection protocol, embracing a ROCC program that gives franchisees the security of knowing what is coming and the tools that they need to correct their operational deficiencies. We secured our ad contribution through at least 2020, thereby

avoiding the constant conflict that had ripped the system with a need to renew the contribution commitment every three years or less. And we inspired KFCC to voluntarily invest in not only food innovation, but in the equipment that a store would need to execute on that innovation. KFCC is to be lauded for its agreement to provide every store with a $20,000 credit toward the purchase and installation of a packline. Additionally, to make the restaurants more appealing to customers on the street, we stand now on the precipice of the incentive scope remodel program, now known as the American Showman Asset Program or ASAP. Restaurants that enroll in ASAP receive a number of benefits, including a reduced requirement for asset renewal or remodel, a cap on the next remodel requirement 10 years from now, and for many locations, a financial incentive to make the investment required now to help KFCC reach its goal of having 70 percent of the restaurants in the system remodeled by end of 2017. Take a deep breath and look at the last few paragraphs that I have written. Imagine how long it has been since this much progress has been made on so many issues in such a short period of time. Just a couple of years ago, the KFC Brand was in a vicious cycle of downward sales, inability to invest, and an unwillingness of the parties to work with one another. Together, we have changed that for the betterment of us all. And that is really my point. Working together, it is almost always the case www. akf c f . c o m

advertiser that franchisees and franchisors can get far more done than when they are working against each other. It is my hope that as we celebrate these accomplishments, we recognize that the greatest accomplishment of all isn’t any one of these singular achievements, or even all these achievements together; it is the creation of what I hope will be a long-standing, even permanent, culture of collaboration. To that end, the AKFCF leadership recently participated in a long-range strategic planning session, identifying the issues in front of the AKFCF for the next few years, and where we want to focus our time and resources. Almost unanimously, the AKFCF Board and its past presidents identified creating and enhancing this system of collaboration with KFCC as its number-one objective. I am proud to be associated with an organization that has such foresight. To be sure, we cannot abandon our mission to preserve and protect the rights of franchisees. As we move forward in this culture of collaboration, it is critical that we stay true to who we are and what we are here to do. Certainly, KFCC knows what its mission is and will stay true to that too. But if the last year and a half has taught us anything, it’s quite possible for both sides to meet their own needs, while meeting the needs of other. I am not sure what you are doing today as you read this. Many of you likely are going to have some issues in your restaurants today, or sometime this week, that are going to seem frustrating and distracting. However, the reality in this culture of collaboration is that not only are your fellow franchisees here to help, but almost as often, so is KFCC – and if they are not, your AKFCF is here to help move the Company in that direction. That is the true essence of a culture of collaboration – a culture I hope to foster for a long time to come.

INDEX

Page ADVERTISER

35 3M

31 Kitchen Brains

27 Bama Companies, Inc.

41 Koch Foods

55 BHT Resources

57 Manitowoc Foodservice

29 Café Valley Bakery

45 MC Sign Company

36 Case Farms

23 NDA, Inc.

C2 Dallas Group of America, Inc. (The)

13 Del Monte Foods Inc.

C3 Dr Pepper Snapple Group

18-19 Pepsi Cola

3 Ecolab Kay Chemical Company

7 Pacific Premier Franchise Corporation 17 Paychex, Inc.

1 Pilgrim’s

40 EnviCor

51 Procter & Gamble Distributing

55 Federal Heath

25 R.F. Technologies

55 Fresh Alarm

5, 24, 54 RSCS

33 Frontline International Inc.

46 Sesco

55 FSV Payment Systems

32 Spirit Realty Capital

55 George H. Pastor & Sons

39 Sprint Wireless

37 Guardian Protection Services

11 T&S Brass

47 Gycor International

22 Trendco Supply

44 Honkamp Krueger & Co. PC

52 Tyson Foods, Inc.

55 Hyginix LLC

C4 Winston Industries

55 Jamesway Construction Inc.

55 Worcester Industrial

43 KFC Foundation

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. Win ter 2 015

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L o o k i n g

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L o o k i n g

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