⛫ Kentucky Fried Crisis?
PLUS: The latest Empires episode
To Empire Builders,
Happy Sunday and welcome to this week’s (late) newsletter.
Today’s edition covers KFC at a glance, and features one of the best podcast interviews I’v ever done!
Let’s dive in 🫡
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What’s on My Mind 🧠
Can KFC Turn it Around?
KFC was once the king of fried chicken in the U.S.
They once did more systemwide revenue than any fried chicken chain.
But after being dethroned by Chick-Fil-A in 2012, Popeyes surpassed them about a decade later. Last year, so did Raising Canes, and this year, Wingstop is projected to take the #4 spot.
This means KFC will have gone from #1 to #5 in ~14 years.
They’ve watched, as other concepts gained marketshare and customer affinity with chicken sandwiches, tenders, and wings.
Meanwhile, they’ve largely led with a bone-in chicken menu.
A Tale of 2 Brands
When you look at KFC, there’s KFC US, and KFC Global.
Outside the States, the brand is a juggernaut.
China alone has 3x as many stores than in America, that contribute 2.5x as much revenue. The U.S. footprint is just ~12% of KFC’s 32,000+ stores.
While Yum! Brands has driven serious growth and profit via their international divisions for KFC…it’s come at a cost.
They’re no longer the leader in the market that built the brand in the first place.
They finished 2025 with U.S. same store sales down 1% overall (albeit seeing increases in q3 & q4).
Crisis or Comeback?
The AUV in their most recent FDD, that came in last week, shows $1,346,365 for all single-brand outlet stores for the 2025 fiscal year.
For any fried chicken chain that is doing north of $1B in total revenue, they are by far lagging in last place with their AUV.
Note: most of the data for the other chains is from 2025 FDDs, but none will be lower than KFC regardless once the fresh data is out.
That chart also doesn’t account for newer brands like Dave’s Hot Chicken, who have reportedly been doing ~$3M in average revenue per store (for more on Dave’s, listen to my podcast with Kal Gullapalli, a 25+ unit owner).
In today’s operating environment with supply chain and wage inflation, $1.3M is a tough place to be, to say the least.
So how does KFC turn the tide?
Well….I don’t have the answer. While the brand was busy growing globally, Cane’s and Chick-Fil-A have become giants, and Zaxby’s, Wingstop, Popeyes, etc. are no slouches either.
Yum! Brands recently said they’ll start running the Taco Bell playbook at KFC in the U.S….aka, they’ll start blending value-based menu design with buzzy limited-time offerings on a routine basis.
But I think the problem runs deeper at this point.
The brand doesn’t stand for anything in the minds of consumers.
Cane’s speaks to craveability, quick service, and consistency. Chick-Fil-A speaks to great hospitality and a great chicken sandwich.
But KFC has been forgotten over the years.
Time will tell if they can become memorable again.
Live on Empires 🎧
From Soviet Refugee to $12M Restaurant Empire
Orhan Veli - SaladWorks
“I’m gonna go do this, and when the communists come back, am I being sent to Siberia? Is that what’s gonna happen?
Born in the Soviet Union, Orhan Veli now owns 12 restaurants. They do over $12M+ per year, and his journey to this point has been remarkable.
His family fled Azerbaijan with nothing, and moved to Moscow. There - his father started a convenience store business right after socialism disappeared.
But locations got burned down by the mafia if he didn’t pay tribute to them, so they moved to the U.S. to find stability…but that didn’t come easily.
His father previously worked on space stations in the Soviet Union. In the U.S.? He started as a humble pizza delivery driver.
Orhan himself recounts his first days of middle school in Jacksonville, Florida -
“You don’t even know you’re being picked on because you don’t understand the language yet”.
Little by little though, his family assimilated into the United States. They moved to Philadelphia, where Orhan’s father became a software engineer in the early 2000s.
Orhan went to Penn State, and turned down a great job at Morgan Stanley to become a franchisee of Charleys Cheesesteaks.
Today though…he owns 11 Saladworks that do ~$11M per year in revenue, making him the top franchisee. He’s also a co-owner in a casual dining concept called Dooney’s Pub.
The journey from the former Soviet Union to the U.S. is just half the story.
His rise as a franchisee over the last 20 years is equally remarkable.
Orhan is a living example of the American Dream 🇺🇸
Episode is live on Spotify, Apple, and YouTube!
QSR Corner 🍔
Fat Brands Bankruptcy Impact on Zees
From diminishing marketing support to a sale of assets, operators could see changes that impact operations.
Applebee’s & IHOP Unite
Can the fusion of two large brands revive both?
Chicken Thighs are on Fire
Dark meat used to be unpopular, but now, “people are eating more chicken thighs—for protein, for flavor, and for economical reasons”.
Crumbl App Sees Mass Downloads
A smart TV partnership with Samsung Ads drove over 16,000 downloads of the brand’s mobile app.
Mike’s Red Tacos Hires CDO
Patrick Cunningham previously served as Chief Development Officer at Bobby’s Burgers by Bobby Flay, and before that, Vice President of U.S. Development for Little Caesars.
Best of the Rest 🧱
Top Ikea operator eyes 800 job cuts
Ingka Group CEO Juvencio Maeztu said the company has “grown too complex in a retail environment that requires speed and agility.”
Dollar Tree Traffic Declines
CEO Mike Creedon attributed the traffic declines to the retailer’s restickering efforts, which the executive said are largely complete.
The C-Store World is Evolving
Big chains are gobbling little chains as the operating environment creates headwinds for small players.
GLP-1’s are Making an Impact
Destination XL, the plus-size apparel retailer reported Q4 total sales decreased 6%, citing GLP-1 usage.
That’s it for today’s newsletter, if you enjoyed it, please forward to anyone else in your network who would benefit or find it interesting!