KFC Current Situation
Part of this can be seen in the company's inability to successfully introduce its Hot Wings product.
PepsiCo's ownership has also brought about a number of other changes that puts the company in a weakened position, including increased dissension with franchisees. KFC's franchisees have a history of being allowed to run their operations as best they see fit, with little or no interference from the parent corporation. PepsiCo significantly changed the franchisee agreement without heralding the change; the surprise move led to disenchantment among many of the franchisees. This could result in these operators looking to other fast food establishments with whom to affiliate (particularly Church's or Popeye's, two of KFC's major competitors who also serve chicken and who are owned by a single corporate entity).
After the initial dissatisfaction with the Pepsi ownership, franchisees have reached a level of satisfaction with the company that enables all parties to focus on expanding market share and increasing the presence of KFC in the market. PepsiCo has eliminated references to the Colonel in most of its advertising, and franchisees have enjoyed greater autonomy in their operations as both the corporate office and the franchisees have gotten used to the new arrangements. Nonetheless, PepsiCo should be careful to maintain close relationships with franchisees as they are the most critical part of the company's operations.