Several branches of KFC closed down suddenly on Monday morning, and the move came with mass layoffs for KFC employees across the state.
The Illinois stores were all run by franchisee EYM Chicken Operations, with some employees being notified as late as 9AM.
Multi-State Operation
Issues with the viability of franchisee EYM Chicken Operations threaten chains beyond just Illinois.
Aside from owning a chunk of Illinois’ almost-150 KFC stores, the group also own several KFCs in both Wisconsin and Indiana.
Fast Food Price Spikes
Fast food has faced a number of price spikes in 2024, with customers noting greasy staples such as Big Macs reaching luxury prices.
In response to this, franchises have begun to offer value meals for $5 or less in an effort to recover customer footfall.
Customer Notification
Customers who arrived at their local branch looking for breakfast would have received the news of closure via a note posted on the door.
Different notes were left on different storefronts, with one example reading “So sorry but all KFC’s have been closed down.”
Firing Earlier in Month
The signs may have been starting to show earlier in the month, as one employee describes how he was notified that he had lost his job.
According to WMBD, he was informed by the director of operations while he was vacationing, and felt “treated as though he did something wrong.”
Closures Confirmed
The closures were officially confirmed by Yum!, the franchise mega-company that acts as the parent company to the KFC stores.
They said, in a statement: “We can confirm that some KFC locations in the area have closed. The decision to close a restaurant is always difficult for both the franchisee and the brand. We appreciate the patronage of our loyal guests.”
Late Call
One teenager received a late call informing him of the decision to close the store on Monday morning.
18-year-old Andrew Bush was told at around 9AM, by his district manager, that his Washington, Illinois location would be permanently closed.
Letter to Customers
One Springfield store left a longer note aimed at customers, thanking them for their support and announcing, “with mixed emotions,” the closure of the store.
It said: “We want to thank each and every one of you for your continued patience and understand during this transition period. Your support has meant the world to us, and we are truly grateful for all the memories we have shared with you.”
Locations Closed
Several locations have been confirmed to be shut down, some more abruptly than others, but the full list may not be complete.
3 stores are confirmed closed in Rockford, along with KFCs in Bartonville, Champaign, and Decatur.
Downed Tools
Pictures taken by the Springfield State Journal demonstrate the stasis the stores have been left in.
Buckets full of cleaning liquid can be seen, and take-away boxes remain piled up on counters.
Shifting Tastes: Health Trends Impact Fried Chicken
Consumers are increasingly opting for healthier food options. KFC’s sales growth has slowed, with same-store sales increasing only 2% in 2019.
The fried chicken market is expected to grow at a CAGR of 5.1% from 2021 to 2026. KFC has introduced healthier options like grilled chicken to adapt to changing tastes.
Digital Divide: KFC Struggles with Online Ordering
KFC has been slow to adopt digital ordering technologies. Online delivery sales now account for 11% of all restaurant sales.
KFC’s mobile app lags behind competitors in user ratings and functionality. The company plans to invest $80 million in improving its digital infrastructure.
Labor Shortages: Staffing Issues Force Store Closures
The fast-food industry faces significant labor shortages. KFC has reported difficulties in hiring and retaining staff.
The turnover rate in the fast-food industry reached 150% in 2020. Some KFC franchisees have reduced operating hours or closed locations due to staffing issues.
Franchise Friction: Corporate-Franchisee Relations Strain Business
KFC’s relationship with its franchisees has been tumultuous. 95% of KFC’s US stores are franchisee-owned.
In 2019, KFC’s parent company, Yum! Brands, faced a lawsuit from franchisees over marketing strategies.
Real Estate Realities: Prime Locations Become Unaffordable
Rising real estate costs have made some KFC locations unprofitable. Commercial rent in urban areas has increased by an average of 19% since 2015.
KFC has closed underperforming stores in high-cost areas. The company is focusing on drive-thru locations, which now account for 65% of its sales.
