Newspaper article THE JOURNAL RECORD

KFC-Taco Bell `Joint Venture' May Accelerate Trend

Newspaper article THE JOURNAL RECORD

KFC-Taco Bell `Joint Venture' May Accelerate Trend

Article excerpt

DETROIT _ Colonel Sanders is heading for the border.

PepsiCo's KFC and Taco Bell chains have opened four joint restaurants in Detroit, with 50 scheduled to open nationwide by June. Analysts say the move could accelerate a trend of "dual branding" in the cutthroat fast-food business.

Customers can mix and match items from the full KFC menu and a slightly abbreviated Taco Bell menu. In most cases, the combined operations are using existing KFC chicken outlets.

"It's an interesting blend. Taco Bell has a large day business. KFC is traditionally a dinner business," said KFC Vice President Chuck Rawley, who spearheaded the move.

KFC first tested the two-in-one approach in Tapahannock, Va., two years ago and liked the results.

"Now we're at a point that we're ready to expand that test at 50 stores, primarily in the Chicago, Detroit, Philadelphia, Atlanta and Los Angeles areas," Rawley said.

The move is expected to increase annual business per outlet by $300,000 to $400,000, Rawley said Thursday from his office in Louisville, Ky. The converted outlets still represent a fraction of KFC's 5,100 U.S. restaurants.

"The big winner in this is the consumer," he said. "The other, of course, is PepsiCo's shareholders."

A number of food sellers have tested the dual brand approach in recent years. Among them are Arby's roast beef and Long John Silver's seafood restaurants, and the Dunkin' Donuts and Haagen-Dazs chains.

"There's a certain simple logic to having two recognized brands in the fast-food sector in the same location," said analyst Joseph Doyle of Smith Barney in New York. "It obviously makes sense."

The challenge is making it work. Fast-food restaurants depend on the ability to quickly prepare a limited menu of items. Adding new items can hurt quality and efficiency, experts say.

When Long John Silver's added Arby's outlets to some of its existing restaurants, it trimmed both menus, company Vice President Bruce Cotton said from Lexington, Ky. …

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