KFC, franchisees end spat

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KFC Corp. ended a bitter seven-year legal dispute with franchisees over issues of advertising, territorialism and new-product and distribution systems. Although KFC said the terms of the agreement are confidential, it revealed that the Association of Kentucky Fried Chicken Franchisees will be awarded permanent territorial protection; in return, the company will be given more direct influence over "certain national advertising and public relations activities."

In the original dispute, franchisees objected to KFC's plan to scrap an agreement that disallowed a store within 1.5 miles of a franchisee. Franchisees at the time claimed owner PepsiCo was also trying to negate a perpetual agreement limiting their advertising co-op funding to 5% of sales.

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