Only in America

Just when you thought you’d seen it all…

In a move that is sure to confuse even the brightest lawyers.  Food retailer KFC is suing themselves..

“The KFC National Council and Advertising Cooperative Inc., the designer of marketing programs for the world’s most popular chicken restaurant chain, says that Roger Eaton, KFC’s president and chief concept officer since 2008, is promoting grilled chicken over the chain’s more traditional product.”

Full article (courtesy of Bloomberg) after the jump.

KFC Sued for Ads Touting Grilled Chicken Over Crispy (Update2)

By Phil Milford

Jan. 8 (Bloomberg) — Yum! Brands Inc.’s Kentucky Fried Chicken unit, which is promoting its spicy grilled wings by supplying towns with new fire hydrants, is embroiled in a lawsuit that claims it’s biased against extra crispy.

The KFC National Council and Advertising Cooperative Inc., the designer of marketing programs for the world’s most popular chicken restaurant chain, says that Roger Eaton, KFC’s president and chief concept officer since 2008, is promoting grilled chicken over the chain’s more traditional product.

“Eaton appears to believe that the future of KFC lies with grilled chicken rather than fried” and recent proposals to the council “have been heavily, if not exclusively, lopsided towards grilled chicken,” according to the complaint, made public in Delaware Chancery Court today.

The board of the KFC National Council, a separate corporation composed of franchise and company members, is weighted 13 to four for the franchisers. The dispute concerns who’s in charge of setting KFC’s advertising policy, according to court papers.

Council lawyers say franchise sales are down and that “a significant portion of advertising dollars should be spent promoting original recipe.” They ask a judge to rule that the council “has ultimate authority” in directing the ads.

‘Baseless Lawsuit’

Yum!, based in Louisville, Kentucky, reported $11.2 billion in 2008 revenue. Its shares rose 1 cent to $34.72 at 4:02 p.m. in New York Stock Exchange composite trading.

“This is a baseless lawsuit” and Yum “fully expects to win the suit and minimize the waste of time and money spent,” said Yum spokesman Jonathan Blum in an e-mailed statement. He said the new Kentucky Grilled Chicken will generate almost $1 billion in annual sales.

In its hot wings campaign, KFC has repaired 85 fire hydrants in Brazil, Indiana, in return for sticking its Fiery Grilled Wings logo on them, the company said.

Yum says it has more than 15,000 KFC outlets in 109 countries and territories, and serves 12 million customers a day.

The case is KFC National Council v. KFC Corp., CA5191, Delaware Chancery Court (Wilmington).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

Last Updated: January 8, 2010 16:06 EST