New Kfc-taco Bells Planned In Small U.s. Communities
(Sunday, January 07, 2007) - If you're looking for fast food in this town, most of your options are visible from the front steps of the courthouse on Main Street.
There's a McDonald's a few blocks to the north, a Dairy Queen to the south, and a couple of pizza places and a Subway in between. Yum! Brands Inc. of Louisville, Ky., wants to change that by building a combination KFC-Taco Bell restaurant here - and in nearly 500 small communities across the nation. Along with Brownstown, locations stretch from North Pole, Alaska, to Keystone, Fla.
It isn't known whether the company's expansion plans will result in additional outlets in the Lower Hudson Valley, Yum spokeswoman Laurie Schalow said. Yum has a combined KFC-Taco Bell in Elmsford.
Creating more multibrand stores - two restaurants under one roof - is one of Yum's core strategies for boosting its U.S. business.
And although the company faces criticism over nutrition and animal-rights issues, many folks in the Brownstown area, about 40 miles northwest of Louisville, seem to want it to march into rural America.
"A Taco Bell up here would make a killing," said Andrew Ault, a recent graduate of nearby Medora High School. "McDonald's gets old after a while."
Angie Lawburgh, head of the Brownstown Chamber of Commerce, said many residents drive 10 miles to Seymour for movies, shopping or dining out.
If a franchisee is able to build a multibrand restaurant, Lawburgh, a mother of four, said it might give young people another option for part-time jobs and encourage residents to spend more of their money in Brownstown.
Andy Ball, Louisville-area operations manager for McDonald's, said the Yum campaign in rural areas might give people more choices and acknowledged that KFC and Taco Bell will be encroaching on McDonald's turf.
Yum has more than 3,000 multibrand restaurants globally, and it requires new franchisees to have a net worth of at least $1 million, with $360,000 in liquid assets.
In a video on the company's Web site, Scott Haner, vice president of franchise development, tells potential investors that more than 300 of Yum's KFC-Taco Bell multibrand stores are in markets with fewer than 15,000 residents.
Wayne P. Jones, a University of Louisville professor who teaches classes in franchising, called Yum's campaign "a great strategy theoretically."
Real estate, labor and advertising costs in rural areas are generally cheaper than in urban settings, he said, and because the new locations would be franchisee-owned, the investors assume much of the financial risk.
Jones, a former KFC executive, said Yum's new multibrand stores have a better chance of competing against established chains such as McDonald's because they offer more than one style of food.
In Brownstown, not everyone is thrilled by the idea of a new fast-food brand.
Bessie Stokes, who owns Bessie's Home Cooking across from the courthouse, said her small diner competes with McDonald's and other existing restaurants.
"I don't think we need it," Stokes said of the possible Yum Brands franchise. "Every time you turn around and put in another fast-food place, it just hurts the small businesses."
Eleanor Morgan, said it would be nice if her teenage granddaughter didn't have to go all the way to Seymour for a part-time job. As she sipped a cup of coffee in the diner, Morgan, a retired nurse, said she would continue to eat at Bessie's regardless of how many new restaurants arrive.
Having a KFC and Taco Bell would simply lead to better variety, Morgan said, because the options now are slim: "It's pizza, pizza, Subway and McDonald's."
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