Yum! Brand's Taco Bell Crumbles in Backlash

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Taco Bell would do well to remember the adage "If you can't say something nice about someone, don't say anything at all."

Following the death from cancer of the man who's credited with creating the restaurant chain's wildly popular Doritos Locos Taco, it was learned that his widow was left with a mountain of medical bills and hadn't received any compensation from the company for his taste creation. Not that he was really entitled to anything, and his wife admits Todd Mills was always appreciative of how Taco Bell treated him (he was invited to be one of the first to taste the new menu item when it was introduced). But the company plunged headlong anyway into a controversy by opening its mouth and now risks swamping Yum! Brands (NYSE: YUM  )  with ill will at a time it can least afford it.

Drop the chalupa
Mills came up with the idea of a Doritos-flavored taco while watching TV, and after being turned down by PepsiCo's (NYSE: PEP  ) Frito-Lay division, which owns the Doritos brand, he launched a Facebook page to campaign for its creation. Yum!'s Taco Bell eventually took him up on the challenge and it's gone on to become one of its most successful new product launches, generating more than $1 billion in revenue.

But Mills was subsequently diagnosed with cancer this past August and succumbed to the illness on Thanksgiving Day. As fan tributes to his creation were posted on Facebook, they soon turned to the matter of his family's medical bills and the lack of compensation he received.

While the hubbub probably would have died down eventually, as all he did was create a fan page for the food, Taco Bell instead threw gasoline on the fire by issuing a mass email saying that while it appreciated Mills' passion for the Doritos taco, don't get it mixed up, he didn't invent anything and was really just a big cheerleader. Oh, and because we made $1 billion on the idea, we kicked in $1,000 for his medical bills.

As the Arkansas Times noted after receiving one of Taco Bell's emails on the matter, "There are good ways to handle these sorts of situations, and there are bad ways. Sending out emails like this ranks on up there with some of the worst. Taco Bueno tacos are better, anyway."

Needless to say, Taco Bell's Facebook page has now been taken over by people excoriating the company for being heartless, and it risks dragging Pepsi's Frito-Lay division into the morass as comments there are beginning to mount calling for these multibillion-dollar corporations to do more for the man's family and boycotting their products until they do.

Birds of a feather
In fact, this is turning into a no-good, very bad month for Yum! In addition to Taco Bell, its Pizza Hut chain was getting its own boatload of bad publicity after a franchisee fired a manager who refused to open a local store on Thanksgiving Day so his workers could be with their families. Coming as it does while Yum!'s KFC brand continues to fail in China due to year-old problems with its chickens, the restaurant operator is finding itself with more black eyes than it even has eyes.

Time and again we've seen companies sink their stocks because of their own loose lips. Yum! Brands will undoubtedly rebound from this PR fiasco (though it wouldn't surprise me if it started with a financial contribution to the Mills family's bills), but as the country song says, "You say it best when you say nothing at all." Those might be words any number of companies should choose to live by.

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Related Tickers

9/27/2016 4:01 PM
YUM $89.86 Up +0.34 +0.38%
Yum! Brands CAPS Rating: ****
PEP $107.49 Up +0.46 +0.43%
PepsiCo CAPS Rating: ****