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Yum! Under the Gun

Sure, it would be nice if more Americans ate a more balanced diet. But it seems every food company out there is desperate to claim that its chow can turn Joe Sixpack into Charles Atlas. This message sounds especially strange when it comes from fast-food companies, which have built their fortunes on fried cuisine.

Yum! Brands' (NYSE: YUM  ) recent run-in with the FTC over ads for its KFC chain shows the perils of trying to reinvent fast food as health food. But here's a secret: Most customers don't eat at fast-food restaurants for their healthy fare. No, people go because the entrees taste good, the prices are low, and the service is fast. Many people still, and probably always will, like fried food, and there's nothing wrong with that. A company like Yum! would do well to remember its roots, especially for its KFC chain.

I don't mean to suggest that Yum! and other fast-food outfits should not offer healthier options or improve their traditional menu items, as long as they don't sacrifice taste. After all, McDonald's (NYSE: MCD  ) has had success with its new salads. But its recently introduced McGriddle, a melange of bacon, sausage, cheese, egg, pancake, and maple syrup, has also been selling like gangbusters. New products often instill new life into restaurant sales. But don't pretend there aren't deep fryers back there.

Yum!'s marketing antics with KFC do not take away from its commanding global presence. That, along with the company's recent initiation of a $0.10 per share dividend, is enough to make one's mouth water. If Yum! can strike the right balance between KFC's traditional menu and healthier alternatives, though, the stock would be even more appetizing.

The Fool has several Food & Drink discussion boards. Share recipes and talk about your favorite foods with others.

Fool contributor Brian Gorman is a freelance writer living in Chicago, Ill. He does not own shares of any companies mentioned here.


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Related Tickers

2/10/2012 4:00 PM
YUM $64.74 Down -0.17 -0.26%
Yum! Brands CAPS Rating: ****
MCD $99.47 Down -0.52 -0.52%
McDonald's Corp CAPS Rating: ****

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