KBP Brands Grows KFC Portfolio With Pair of Deals

KBP Brands grew its portfolio of KFC, Arby’s and Taco Bell stores over the past two decades largely by acquiring underperforming restaurants.

That was not the case this summer when the Kansas-based franchisee bought 41 KFCs in North Carolina and South Carolina from a pair of prominent restaurant groups.

“The 13 KFCs we purchased in June were close to being on par with the national average in sales and the ones we purchased in July were high performing locations,” KBP founder and CEO Mike Kulp said. “These two acquisitions are far from being turnarounds for us.”

The purchase from Scottish Foods Systems added 28 KFCs to its portfolio in North Carolina, and it bought 13 more from Cary, North Carolina-based Luihn VantEdge Partners. Those units are in Raleigh and Durham, with one restaurant in Klingstree, South Carolina.

The two deals bring KBP’s count in KFC to 832 locations in 28 states. The group owns 118 Arby’s restaurants and 54 Taco Bells in six states. It has 147 dual-brand units, including 109 KFC/Taco Bell locations, 33 KFC/Long John Silver’s and five KFC/A&W locations.

KBP is ranked No. 4 on the Franchise Times Restaurant 200 list with $1.34 billion in sales for 2023.

Laurinburg, North Carolina-based Scottish Food Systems operated KFC restaurants since 1964 when founder Edwin Pate signed an agreement in his home state with the founder and face of the brand, Colonel Harland Sanders. The company expanded to 28 KFC restaurants under Tom Broome, the president since 2007.

“It’s strictly anecdotal, but my understanding is that Tom and its board were considering a succession plan for the company and instead of going through that process they decided it was best to just sell their KFCs. We were fortunate enough to acquire their restaurants with a number of other groups bidding for it,” Kulp said.

Founded in 1999 and with a focus on restaurant development, KBP Brands has grown its portfolio of KFCs, Arby’s and Taco Bells with a series of large acquisitions over the last 25 years. Its largest growth years were 2017, when it acquired 208 KFCs in eight states, and 2018, when it bought 105 KFCs in 14 states.

The company started diversifying its portfolio in 2019 when it formed KBP Bells and acquired 27 Taco Bells in Colorado. In 2021, it bought 117 Arby’s units in five states under the sub group KBP Inspired. 

KBP added a text messaging and mobile wallet digital marketing program from Vibes to all of its KFC locations last year after a successful test run. KBP’s test included unique promotions offered to customers who were then rewarded for repeat visits or opting into the SMS program. It also delivered real-time, targeted messaging, such as limited-time promotions, local menu tests and hours of operation.

The test yielded 30 percent month-over-month subscriber growth, the company said at the time. 

“Our strategy has been to find opportunities with scale to get into new geographies,” Kulp said. “We’ve been able to maintain pretty much consistent explosive growth by building a solid infrastructure and creating efficient systems that support our restaurants with marketing, HR, talent recruitment and training. We also give our more capable restaurant employees and managers a path to upward mobility.”

Kulp said moving forward, KBP Brands is interested in continuing to diversify its restaurant portfolio and is exploring breakfast and coffee concepts. 

“We are also open to entering the automotive care and mobile technology space, really wherever we see opportunity for us to be profitable and successfully scale the business,” he said.

“No matter what direction we choose to go, it will be a measured and disciplined approach. As a firm committed to the franchising model, we believe that a growing business is healthy business,” Kulp said.