KFC chicken shortage: advice for franchise owners20 Feb 2018
KFC has closed more than 600 of its 900 UK outlets after delivery problems meant they have ran out of chicken. This is as result of KFC switching its delivery contract to DHL, which blamed “operational issues” for disruption to the supply of chicken.
Understandably, a lot has been said about the workers at the outlets, some of whom have been encouraged to take holiday, but what about the owners of the franchises?
The franchise owners have to comply with strict rules as to how, why and where they can sell products under the KFC brand. Without KFC chicken, they have no option but to close, losing money and goodwill rapidly.
Whilst some overheads can be minimised (staff, stock and utilities), others like rent and business rates will continue to mount up.
Our advice to franchise owners is to contact their insurance broker immediately and see if they are covered for the ongoing losses attributable to the closure under their existing insurance policies. If they do not have appropriate business interruption cover they should seek legal advice as to whether they can claim losses from KFC, either under the franchise agreement, or outside of it.
If you would like further advice on this issue, please contact David Jones on 0161 838 7993 or contact us