- Kentucky Fried Chicken’s parent company announced that the restaurant chain’s U.S. headquarters would be leaving Kentucky. It’s the second time the chain would leave the state, having relocated its HQ to Nashville just after being purchased by Colonel Harland Sanders in the 1960s.
Kentucky Fried Chicken’s parent company is moving the restaurant chain’s U.S. headquarters out of its namesake state for the second time.
KFC parent Yum! Brands said in a Tuesday statement that it would relocate the iconic fried chicken chain’s corporate office to Plano, Texas, from Louisville, Ky. Around 100 employees will have to move to Texas over the next six months, and another 90 remote employees will be asked to relocate over the next year and a half, the company said.
Yum! Brands CEO David Gibbs said the Texas move was meant to help the company with “sustainable growth” and “culture.”
“Ultimately, bringing more of our people together on a consistent basis will maximize our unrivaled culture and talent as a competitive advantage,” he said in the statement.
Yet, another possible consideration could be lower taxes and a business-friendly environment, said Paul Miller, accountant and founder of CPA firm Miller & Company, LLP. While Kentucky levies a 5% corporate tax rate on businesses’ profits, Texas does not have a corporate tax rate and instead imposes a lower gross receipts tax of between 0.331% to 0.75% that is applied to a company’s gross sales.
Nearly all of KFC’s restaurants are owned by franchisees, not the company, and the franchisees will pay royalties to the new Texas corporate headquarters. Because the corporate functions of KFC restaurants, such as payroll and accounting, will take place in Texas, the company will pay the bulk of its taxes in that state, said Miller.
“There are ways to allocate income and bring more of your income to Texas versus keeping it all in Kentucky,” Miller told Fortune.
Kentucky Fried Chicken’s first move out of Kentucky
It’s not the first time KFC has moved its headquarters out of Kentucky. In the 1960s, founder Colonel Harland Sanders sold the chain to fellow Kentucky native John Y. Brown Jr. and Tennessee businessman Jack C. Massey, who insisted the company move its headquarters closer to his home in Nashville.
Brown was not happy with the move, but was outvoted because Massey owned a 60% stake in the company, according to the 2005 book The Human Tradition in the New South, by historian James C. Klotter.
Sanders was incensed by the change, and is quoted by Klotter as saying “This ain’t no goddamn Tennessee Fried Chicken.”
When Massey resigned as chairman of the board in 1970, Brown moved the company’s headquarters to Louisville.
