Chapter 614 KFC’s Rapid Development

Chapter 614 KFC’s Rapid Development

Chapter 614 KFC’s Rapid Development

The meeting with Li Xiaolong was just a coincidence and it was nothing big in itself. Only when the filming of this movie is completed, that will be the first step to success, both for Li Xiaolong's Hollywood journey and his own global entertainment industry layout.

On May 5, Yang Wendong came to a 9-story building south of downtown Los Angeles, where he met an older acquaintance, who was the founder of KFC: Harlan Sanders.

"Eric, long time no see." Sanders' voice was a little hoarse.

Yang Wendong quickly said, "Yeah, it's been almost a year, what happened to your voice?"

"It's normal. I'm old, so of course my voice isn't very good." Sanders said with a smile.

At this time, a middle-aged man in his 50s next to him said, "Mr. Yang, my father had the flu last month, and it was quite serious. He was hospitalized for more than a week. Although he recovered, his health is not very good. He coughs frequently, and his throat is always uncomfortable when he speaks."

"I see. Flu should be taken seriously." Yang Wendong nodded and said, "Sanders, if you're not feeling well, just take a rest. Work is important, but it can never be more important than your health."

Sanders nodded and said, "Yes, I know. Even if I think work is important, it's useless. My health is not good. It just so happens that you are coming to Los Angeles this time. I also want to tell you that I want to officially retire."

"Okay, no problem. I will ask KFC to give you enough pension every month." Yang Wendong agreed.

It would be too much to refuse, because Sanders is already 81 years old this year, which is 16 years beyond the retirement age even in his previous life in the mainland.

There are indeed a few super-rich people who are still working in their eighties or nineties, but they are basically just participants. Sanders is not the boss yet, but he is doing the work of a CEO, although he has basically been just a participant in the past few years.

No matter what, it was not suitable for him to work at this age. He should retire and rest. Yang Wendong naturally agreed and gave him some retirement funds.
In fact, this pension is nothing to the Sanders family. After all, KFC was sold for millions of dollars.

Sanders smiled and said, "Okay, thank you very much."

"I should be the one thanking you, Sanders." Yang Wendong also said with a smile.

After successfully purchasing KFC, Sanders could have retired directly, as he was already quite old, but he continued to work for KFC because he liked it more.

He had done the same thing in the past, probably because he took into account his limited abilities and that KFC would be too stressful in his hands. But if it was in the hands of other big capitals, at least he wouldn't have to worry about funding.

Yang Wendong was naturally happy that the founder could continue to work. Not all company founders were capable, but most of them were much more reliable than randomly searching outside.

Sanders smiled and said, "Eric, this is William. You have met him once. He will be the head of KFC in the future. Next, he will report to you on KFC's recent progress in the United States in recent years and its development plan for the next five years."

A blond white man in his 50s next to him also said, “Hello, Mr. Yang, here are the various stores and financial data of KFC in the United States. There are a total of 1326 stores, of which 212 are self-owned and the rest are franchised;
We now have a total of 23 slaughterhouses and 4 distribution centers, covering some cities in the central, eastern and western United States, accounting for approximately 42%.

Last year’s total turnover was $1.26 million and net profit was $1175.36.”

"The profit margin is not very high? Is it because we need to continue expanding?" Yang Wendong asked while looking at the data.

The profit margins of traditional industries are generally not very high, but at least they are all above 10%. The food industry is generally even higher. This is a characteristic of this era.
It was only after the 21st century that the efficiency of the Internet led to fierce competition, social enterprises became more competitive, and the profit margins of many industries declined. Of course, due to their scale, the profit margins of large enterprises are generally low. Even Apple in its previous life had a profit margin of just over 30%, which may not be as good as a small factory.

William replied: “Yes, we are now advertising on a large scale to compete with McDonald’s, and franchise expansion also requires publicity. Last year’s advertising expenses were as high as 830 million US dollars;
In addition, we need to build more slaughterhouses and chicken factories according to the location, and we also need to invest in transportation to meet the needs of franchise expansion.”

To run a high-quality franchise store, it is not enough to just collect money. The relevant supporting facilities must be well prepared. At the very least, you have to deliver the food they need on time and in the right amount according to their needs. No more and no less.
This task is easy when there are few stores, but when there are a large number of stores, the capital investment required to maintain the entire distribution system is also huge.

"Well, how many stores does McDonald's have now?" Yang Wendong asked.

He also knew that in an era without the Internet, it was extremely difficult to manage logistics well. Carrefour in Hong Kong also often had problems, and this was in one city. Therefore, the rise of Walmart in this era was definitely not just a coincidence. Just managing logistics in the United States required very strong capabilities.

Of course, KFC’s delivery options are definitely far less than those of supermarkets, and relatively speaking, they are also much simpler.

William replied: "About 1700."

"Then at this rate, we will be able to catch up in a few years?" Yang Wendong asked back.

In the past, KFC was restricted or even sucked away by its owners in the 1970s and 1980s, so it has never surpassed McDonald's in terms of scale. Even if it captured the domestic market, it was still not enough.
If I could build the first fast food restaurant in the United States, it would be a very memorable achievement.
As for things like fast food restaurants, let alone now, even decades later, it is unlikely that the Americans will protect this industry. It will be a constant cash cow. Although it cannot compare with the technology giants, at least you can hold it directly for a long time.

William nodded and said, "In theory, that's right. McDonald's certainly can't match us in terms of funding, but I heard that they are also seeking help from Wall Street recently. If it works, they may also have some financial support."

"That's fine, we just need to do our best." Yang Wendong nodded and said, "We'll just continue to expand. What are your plans for the next five years?"

The five-year plan is a set of rules that Yang Wendong customized for some of his industries. It does not need to be very detailed, but it needs to have a clear direction to ensure future development.

Especially for those industries that the prophet's golden finger cannot control, we can only rely on professional managers. Yang Wendong is also more concerned about these.

William then replied: "In the next five years, the company plans to continue to maintain a low-profit model, make full use of Citibank's funds, quickly expand to 200 cities in the United States where there is no KFC, and establish corresponding food factories and distribution systems. The total investment is estimated to exceed million US dollars;
In addition, in terms of publicity, if the coverage area is large enough, we can enter the three major TV stations for publicity, which will be more effective. "

If you want to advertise on the top TV stations, the prerequisite is that your product must cover the whole country. Otherwise, if only half of the states have your product, then the national advertising will be half ineffective.

KFC's store expansion can only be done from a point to a circle, gradually. At most, if they have more money, they can order more, but it is impossible to open stores all over the country at the same time, and the franchise model is not feasible either.

"I have a good relationship with RCA. If you have any needs, you can go to NBC. There may be some discounts or better resources." Yang Wendong nodded and said, "In the future, I will also have some business dealings with some Hollywood companies. KFC can also participate in Hollywood advertising placement as appropriate."

William smiled and said, "It would be even better if it could be done this way. I have long thought about getting KFC into some movies, but small movies don't make much sense, and big-name movies may not have the resources."

“Well, there’s no rush. We need to wait until you cover the entire country or at least most of it.” Yang Wendong also said.

Although many film companies will make money, they have restrictions on soft advertising due to film quality considerations. Therefore, it is very difficult to insert advertisements into blockbuster movies. It is similar to the prime time on TV stations, which is not something you can buy with money.

PS: Please give me a monthly ticket
(End of this chapter)