Franchise News Release: Louisville, KY - (Nov-7-2001)

KFC Announces a Broad Quality Initiative to Deliver Consistently High Quality Food and Exceptional Service (11/01)

KFC Corporation announces a broad quality initiative to deliver consistently high quality food and exceptional service to customers. The heart of this initiative is a new Hot & Fresh program designed to improve freshness and flavor from the kitchen to the counter by cooking less food more often. Food flavor enhancements, plated meal packaging and updated facilities are being implemented to further enhance the KFC experience. A comprehensive customer care program has also been incorporated to evaluate, monitor and optimize the customer experience in each restaurant.

The Hot & Fresh program is a permanent shift in the way KFC® does business. To date, all company stores and more than 3,000 Franchise stores -- approximately 80% o KFC's total U.S. Restaurant base -- have enlisted in this system at an investment of $120-$140 per restaurant. Harman Management, a 300-unit KFC franchisee based in Los Altos, California, developed and refined the program approximately one year ago, incorporating it into nearly 250 stores. Year-to-date, Harman has experienced high single digit growth in same store sales with nearly half of that growth credited to the Hot & Fresh program.

"We are raising the quality bar across the board and continuing to differentiate KFC from other Fast Food restaurants," says Cheryl Bachelder, KFC Corporation President and Chief Concept Officer. "Our customers are getting a better eating experience through great tasting real food, freshness, diversity and quality."

Back-of-the-House Implementation

The Hot & Fresh program does not require additional kitchen support, only additional employee training. The premise behind the program is simple:

Cook smaller quantities of food more often
Use kitchen timers and a food tagging system to monitor and control the freshness of the food served to customers. By strictly regulating hold times, making every member of the restaurant team responsible for freshness, food is served when flavor and temperature are at their peak.

Responding to Customer Needs and Lifestyles

KFC has responded to customer needs by developing menu items that adapt to a portable, on-the-go society and consumer's changing tastes. Popular menu items like Popcorn Chicken, Spicy BBQ Wings, Crispy Caesar Twister® and a more flavorful Extra Crispy™ Chicken have all been introduced to meet that need.

Side dishes are also being evaluated on a regular basis to ensure customer flavor and quality expectations are met. A new, consumer-tested coleslaw recipe is already in many KFC stores throughout the country. " We know that consumers seek more food variety and flavor than what most burger chains serve everyday," says Bachelder. "We will continue to offer new products that broaden KFC's appeal to a wider audience."

Plated Meal Packaging

By the end of 2001, all KFC company-owned stores and most franchise stores will feature new plated meals to fortify the "eat at home" experience. Customers will now be served individual meals on plates with dividers to keep food separated, instead of boxes and Styrofoam containers. Two plates have been developed: a shallow plate for in-restaurant dining and a deeper plate for take-out that keeps foods separate from one another even when tipped.

Facility Enhancements

In addition to enhancing the quality of food and how it is served, the dining experience will be elevated by a bold new restaurant decor. The innovative design, known as Series 6000, will incorporate contemporary refinements to both the interior and exterior of KFC restaurants.

In-store design improvements include bucket-shaped light sconces, ceiling soffits, drop-down lighting and tile treatment offering a home-like feel to the restaurant. Bistro-style high table and historic murals combined with warmer color tones round out the interior. Exteriors feature a cupola tower, red and white striped awnings, re-designed roof and bold Colonel imaging and signage.

Both new and remodeled restaurants will receive this aesthetic package to enhance drive-by appeal and differentiate KFC from other fast food restaurants. Forty percent of company stores will be renovated by 2002, and all will be renovated by 2004. Franchise-owned stores are scheduled to be completed by 2007. Remodelling costs for each store ranges from $50,000 - $250,000.

The Final Evaluation

To ensure KFC excellence throughout the store, various company scorecards are being used to measure quality and help positively impact the customer experience. One of the key techniques is CHAMPS (Cleanliness, Hospitality, Accuracy, Maintenance, Product and Speed) which offers monetary rewards and gratification to employees who successfully deliver a great customer experience in these areas. The system is used to perfect operational performance, drive field-level productivity and elevate customer satisfaction.

In addition to the new quality positioning, KFC launched in July a new $200 million advertising campaign, featuring actor Jason Alexander as a "Chicken Fanatic." The campaign, developed by BBDO Advertising in New York, was developed to tap a competitive nerve against bland food found at other fast food restaurants, especially hamburger chains. KFC hopes its new campaign is the boldest threat yet to capturing share of stomach from the burger giants.

KFC Corporation, based in Louisville, Ky., is the world's most popular chicken restaurant chain specializing in Original Recipe®, Extra Crispy™ and Colonel's Crispy Strips® chicken with home-style sides and freshly made chicken sandwiches. Since its founding by Colonel Harland Sanders in 1952, KFC has been serving customers delicious, already-prepared complete family meals at affordable prices. There are over 11,000 KFC outlets in more than 80 countries and territories around the world serving some 8 million customers each day. KFC is a subsidiary of Tricon Global Restaurants, Inc., Louisville, Ky.

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