July 18, 2013 in Business

KFC debuts new restaurant in effort to tap growing niche

Traditional fast-food chains losing to ‘fast-casual’ venues
Candice Choi Associated Press
 
Associated Press photo

A remodeled KFC in Louisville, Ky., is called “KFC eleven.” It will serve flatbread sandwiches, rice bowls and boneless chicken.
(Full-size photo)

NEW YORK – KFC is tossing out the chicken bones and the quaint image of founder Col. Harland Sanders as it gets ready to test a slightly more upmarket restaurant.

The fried chicken chain says it’s opening a location called “KFC eleven” early next month near its headquarters in Louisville, Ky., that will serve flatbreads with toppings, rice bowls, salads and only boneless pieces of its Original Recipe chicken.

The restaurant’s exterior won’t feature Sanders, whose bespectacled, white-bearded likeness has long been front and center at traditional KFC locations. But the name of the test restaurant is a reference to the 11 herbs and spices Sanders used in the Original Recipe.

KFC eleven’s opening is a reflection of the challenges facing traditional fast-food chains such as McDonald’s, Burger King and Wendy’s. The problem is that people in their 20s and 30s are increasingly heading to chains such as Chipotle Mexican Grill and Panera Bread, where they feel they get better food for slightly higher prices.

In a note to investors about KFC’s test, Janney analyst Mark Kalinowski said such “fast-casual” chains remain the fastest-growing segment in the restaurant industry. He noted that other chains, included Applebee’s and Red Lobster, have recently started testing similar formats as well.

John Cywinski, president of KFC, said in an interview that people often equate KFC with “buckets of fried chicken on the bone,” primarily as a dinner or weekend option. He said the company hoped to use the new test location to learn how it can update its offerings and draw in a broader customer base, particularly women.

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