KFC is offering up table service at an experimental new restaurant, complete with breakfast and premium drinks including iced lattes and milkshakes.
The new format, called “Open House,” is designed to show off and test various aspects of KFC’s overarching turnaround strategy, said KFC U.S. President Catherine Tan-Gillespie. It will open on Saturday in McKinney, Texas.
“It's the Kentucky Fried comeback made real in one restaurant,” Tan-Gillespie said. “It is a real restaurant built to learn.”
KFC’s goal is to optimize new channels, dayparts, menu items and processes for the rest of the system, which the chain can then use to drive up sales volumes.
Experiments over efficiency
Typically, restaurant brands chasing change try to constrain operational and capital expenditures in a ruthless pursuit of efficiency, Tan-Gillespie said. But KFC is trying something different at its Open House location, opting instead to test a broad range of new strategies to determine which ones can improve location sales.
“The premise commercially behind this restaurant is called ‘AUV-maxxing,’” Tan-Gillespie said. “We want to open up as much as we can in terms of driving new channels, driving new day parts, driving new menu options, driving new experiences, [and] new occasions.”
That maximalism contrasts sharply with many of the other moves by QSR brands to refocus on essentials and core products, from Papa Johns’ effort to sell more pizzas to Burger King’s emphasis on the Whopper.
But KFC is facing distinct brand challenges. While many consumers have strong sentimental affinities or nostalgia for the chain in the U.S., much of that latent appreciation is backward-looking.
“We live in memories,” Tan-Gillespie said.
The chain needs to break out of that hazy nostalgia and reframe how consumers can interact with KFC, and what they can expect from its stores and menu, she said.
New dishes, dayparts and drinks
Probably the single biggest change at the Open House test location is the addition of a breakfast menu. According to a press release detailing the Open House’s offerings, the restaurant’s breakfast menu includes “Breakfast Sandwiches, Original Recipe tenders, Hashbrown Sticks, Mini Cronuts, freshly brewed coffee and iced lattes.”
Tan-Gillespie said the brand will offer at least two types of breakfast sandwiches at the location — one sandwich designed to fit into consumers’ pre-existing breakfast proclivities, and a second, more premium one, that brings in the chain’s core menu item.
“Customers will expect bacon and eggs for breakfast, but it wouldn't be KFC unless we included fried chicken,” Tan-Gillespie said.
While breakfast is the most experimental part of the menu, KFC is still targeting other dayparts.
The brand wants to “grow the dayparts outside of what we're famous for, which is dinner and lunches,” Tan-Gillespie said. “If we manage to get afternoon [sales growing] through our Go Bucket snacks, for example, or our [premium] beverages, that's another daypart where we can grow into.”
The restaurant will be open from 6 a.m. to midnight, offering the brand ample opportunity to test different menu configurations and operations schemes, from brunch and breakfast to snacks and late-night fare, Tan-Gillespie said.
One major menu shift is a greater emphasis on sauce, inspired by the performance of the chain’s tenders and sauces-focused spinoff, Saucy.
KFC will serve classic dipping sauces as well as more imaginative flavors like Jalapeño Ranch, Sweet Heat Ranch and Garlic Parmesan, per the press release. Additionally, consumers can get “Original Recipe Fried Chicken, Tenders, Wings and Fries drizzled in craveable flavor for a bolder, more indulgent bite.”
Saucy served as a proving ground for the operational changes underpinning these menu shifts, Tan-Gillespie said.
“Some of the back-of-house mechanics for saucing were really innovative in Saucy. So that's a part that we've built into our range with Open House,” she said.
Open House will also feature new premium drinks like iced lattes, boba refreshers, Krunch Shakes and lemonades. These are derived from the chain’s Kwench lineup, which is already available in some overseas markets, but has yet to come to the U.S.
Those drinks mimic moves by brands like McDonald’s and Taco Bell to add premium drinks, like dirty sodas and cold brew, to the roster of beverages people expect and desire from QSRs.
Table service and consistent value
KFC will leverage its technology — like kiosks and artificial intelligence tools developed through Yum Brands’ partnership with Nvidia — to increase efficiency at the point of sale and free up labor, Tan-Gillespie said.
That labor can then be redeployed to maximize throughput in redesigned channels, like delivery or mobile-order-and-pickup, which are relatively new touchpoints in the QSR sector, Tan-Gillespie said.
But it can also bring the chain’s focus back to in-person, face-to-face hospitality. Per the press release, Open House will feature table service and other customer experience features, like a photo booth and Swag Bar with merchandise.
“Front of house can do more. So they can help the delivery drivers, for example,” Tan-Gillespie said. “They can help customers order on the kiosks. They can still welcome them into the restaurant and they can still help deliver the food to the dine-in experience.”
The restaurant is also designed for a greater on-premise experience, taking up 3,400 square feet and seating 52 guests, per the press release. The standard size for a KFC location is about 1,700 to 3,000 square feet, according to the chain’s franchise disclosure document.
“We've really expanded our dine-in [service] with patio seating, breezeway seating; we've got celebration booths, we've got cozy corners that people can huddle in,” Tan-Gillespie said.
All of these changes are in keeping with shifts by major brands, like Starbucks, toward experiential elements that go above and beyond the usual expectations for fast food.
Ultimately, Tan-Gillespie said, the goal is to offer “a fast casual experience without the fast casual price tag,” by investing in these elements while keeping pricing in line with the prices at similarly located KFCs.
