For the second time, the parent company of the restaurant chain Kentucky Fried Chicken is relocating the headquarters of the chain to a location outside of the state that bears its name.
In a statement released on Tuesday, Yum! Brands, the parent company of KFC, announced that it would be moving the corporate office of the notorious fried chicken chain from Louisville, Kentucky to Plano, Texas.
According to the company, approximately one hundred employees will be required to relocate to Texas before the end of the next six months, and another ninety employees who work remotely will be asked to relocate within the next year and a half.
David Gibbs, the Chief Executive Officer of Yum! Brands, stated that the relocation to Texas was intended to assist the company with “culture” and “sustainable growth.”
“Ultimately, bringing more of our people together on a consistent basis will maximize our unrivaled culture and talent as a competitive advantage,” he said in the statement.
According to Paul Miller, an accountant and the founder of the CPA firm Miller & Company, LLP, higher taxes and an environment that is friendly to business are two additional factors that could be taken into consideration.
While Kentucky imposes a corporate tax rate of 5% on the profits of businesses, Texas does not have a corporate tax rate and instead imposes a lower gross receipts tax that ranges from 0.331% to 0.75% and is applied to a company’s gross sales.
The majority of Kentucky Fried Chicken restaurants are not owned by the company itself but rather by franchisees, and the franchisees WILL?
Royalty payments should be made to the new business headquarters in Texas. According to Miller, the significant majority of KFC restaurants’ taxes will be paid in the state of Texas. This is due to the fact that the corporate functions of KFC restaurants, such as payroll and accounting, will be carried out in Texas.
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The initial exit of Kentucky Fried Chicken from the state of Kentucky
KFC has relocated its headquarters once before, and this is not the first time it has done so.
In the 1960’s, founder Colonel Harland Sanders sold the chain to fellow Kentucky native John Y. Brown Jr. and Tennessee businessman Jack C. Massey, who insisted the company move its headquarters closer to his home in Nashville, Tennessee.
In 1970, Brown relocated the headquarters of the corporation to Louisville, Kentucky, subsequent to Massey’s resignation from his position as chairman of the board.
