Needs an accountant: KFC founder Colonel Sanders

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Colonel Harland David Sanders has become the benign corporate mascot of one of the world’s biggest fast-food franchises.

Like an ultra-corporate Santa Claus, he has been reduced to his signature look – white suit, white beard, string tie and black glasses. The man himself cut a jolly, grandfatherly figure in ads and public appearances. In private, however, he was an intimidating, puritanical man who peppered his speech with profanities. Franchisees would dread a visit from the Colonel, lest he found their gravy wanting.

His exacting standards were the by-product of a decades-long struggle to perfect and promote his recipe for quick, quality fried chicken. He learned to cook aged seven after his father died and his mother took a full-time job. When he was 12, his mother remarried and his stepfather sent him to live and work on a farm. After a stint in the army and numerous odd jobs, Sanders found himself running a service station in North Corbin, Kentucky, where he would sell meals to travellers for extra cash. Word of mouth spread; in a few years, the service station became a thriving restaurant. Sanders felt sure of a job for life, when disaster struck. The opening of an interstate bypass in 1956 caused customer numbers to plummet. Convinced of impending bankruptcy, Sanders auctioned off the business at a considerable loss, and found himself living on a social security cheque of $105 a month.

Finger-lickin’ franchises

Sanders had toyed with the idea of franchising his chicken recipe in the past. He now decided to put all of his efforts into the franchise model, living out of his car as he sold his recipe to one restaurant after another. Within a couple of years, potential franchisees were coming to him. He did all his own bookkeeping and vetting of franchisees, while his wife mixed and packed bags of spice. By 1964, the Colonel had 600 franchise outlets across the US and Canada, all supplied from his backyard. He was 74, and ready to take a step back. Enter young lawyer John Y Brown Jr and financier Jack Massey.

Sanders received a $40,000 annual salary (later raised to $75,000) and $2m in cash for the sale of KFC. He was also offered 10,000 shares in the company, but turned them down. Then he watched Brown, Massey and KFC’s management team become very, very rich. By 1970, Brown was worth well over $50m. Of the 300 staff who worked at KFC’s Louisville headquarters, 21 were multimillionaires. Even the Colonel’s first franchisee, Pete Harman, earned $40m in stock and sales.

Though Sanders was by no means poor as a result of the deal, his earnings were far eclipsed by those of the people who’d invested in his idea. We don’t know why he turned down shares in the company he built. One rumour, publicised by William Whitworth in The New Yorker, was that Massey didn’t want Sanders to be a major stockholder, and so convinced him not to take them. But Sanders never complained. He was more concerned with maintaining the standards of his food. One KFC executive told Whitworth: “With the Colonel, it isn’t money that counts. It’s artistic talent.”

Mark Rowland is a journalist and former editor of Accounting Technician and 20 magazine.

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