MODERN SLAVERY STATEMENT 2023

Kentucky Fried Chicken (Great Britain) Limited Modern Slavery Statement 2023. 
 

Introduction from Meghan Farren – KFC UK&I Managing Director

KFC takes a zero-tolerance approach to any form of slavery forced labour and human trafficking. This is KFC’s Modern Slavery Statement for 2022 issued in accordance with the Modern Slavery Act 2015. 

2022 has been a year that has been marked with stress and turmoil for many, with ongoing conflicts in Ukraine and the natural disasters we have seen across the globe.  This has caused a large amount of uncertainty and economic pressures across the food industry. We know that these added strains leave individuals in a vulnerable position and increase the risk of exploitation of people across the food supply chain, a risk we take seriously!

KFC have over 1000 restaurants and 36,000 colleagues across UK&I and we wish to ensure that we retain the core values set out by our founder Colonel Harland Sanders for our KFC family and those within our supply chain. Through these unprecedented times, our focus on our values and people culture has been critical, ensuring our teams are looked after, our franchise partners are supported, and that we have been actively working with our supply chain to mitigate any challenges. 

The statement below sets out the steps we took throughout 2022 and continue to take as a business to meet the commitments we have made to promoting human rights and the prevention of modern slavery. 

In 2022, we developed and launched a new training model to increase awareness and knowledge of Modern Slavery, Human Trafficking training, Child Criminal Exploitation and Child Sexual Exploitation. This training was developed in conjunction with Stop The Traffik. This included training on child criminal exploitation and child sexual exploitation. To date, 100% of our United Kingdom and Ireland employees have completed the e-learning training. 

In addition, we continue to build on our work from 2021 on improved transparency and risk mapping of our supply chains and across more industries. We have conducted interviews and engagement sessions with our major suppliers around the Sourcing Code of Practice, which included exchanges around human rights risk and mitigation, and re-emphasizing the importance of the SEDEX registration. 

In 2023 we plan to continue with the progress made in 2022 by expanding our training modules to additional colleagues and expanding the risk mapping and transparency across the supply chain.

1. Introduction

This statement is issued under section 54 of the UK Modern Slavery Act 2015 (“MSA”). This statement sets out the steps taken by Kentucky Fried Chicken (Great Britain) Limited, KFC Advertising Limited and other relevant group companies in the United Kingdom and Ireland (“KFC” or “we”) for the financial year commencing 26 December 2022 and ending 24 December 2023 to prevent modern slavery and human trafficking in its business and supply chains. 

KFC published its first Modern Slavery Statement in 2016 following the introduction of the MSA in 2015. We remain committed to building on our pledges to eradicate risks of modern slavery and human trafficking across our business and supply chain through our annual Modern Slavery Statements which can be found here: 2022 Statement; 2021 Statement; 2020 Statement; 2019 Statement; 2018/17 Statement; 2016/17 Statement. We continually review our operations and build our knowledge to mitigate these risks, outlining progress against key performance indicators and intended future actions in our Modern Slavery Statement. This document outlines the steps taken since our last statement in 2022 including achieving 100% SEDEX registration of our direct suppliers. 

About Modern Slavery 
Modern slavery is a criminal act and a violation of human rights. At KFC UK&I we take a zero-tolerance approach to modern slavery, condemning it in all forms including forced labour, forced marriage, debt bondage, forced commercial sexual exploitation, human trafficking, slavery like practices, sale and exploitation of children and the removal of freedoms. Modern slavery remains a real threat in society in all sectors and across all corners of the globe. 

Global uncertainty, from climate change and gender inequality to food insecurity and migration – a result of conflict, famine and the lasting effects of the pandemic - has increased the risk of modern slavery. These risks are heightened in agriculture and food sectors, when there is a greater proportion of temporary or transient labour. ¹ ² 

In 2023 there were 17,004 potential victims of modern slavery in the UK, according to the UK government, and an estimated 50 million victims globally.³ These staggering statistics show that we simply must not be complacent as we build on our commitment to eradicate potential risks of modern slavery in our business and supply chain e.g., through enhancing policies and awareness training in our business and due diligence in our supply chain. 

KFC Values 
KFC UK&I and its franchise partners employ over 33,000 employees across ~1000 restaurants, serving up its finger lickin’ good chicken, cooked from scratch, to its customers. 

The values of Colonel Harland Sanders, to do all you can and do the best you can, remain true today. Protecting the human rights of all employees in our business and wider supply chain is a priority. We have been reporting on our committed focus to mitigate modern slavery since 2016 and during 2023 we continued to strengthen this work across six key areas we believe will create impact. These are: organisation structure and supply chain, policies, due diligence, risk assessment and management, training and performance indicators. 

Progress
During 2023 we made progress on our commitments set out in our 2022 Modern Slavery Statement. We engaged with all our direct suppliers on our Supplier Code of Conduct, conducting interviews to confirm understanding and compliance. During the year we reached our target of 100% registration with SEDEX of our direct suppliers. Training on modern slavery awareness introduced in 2022 was rolled out as mandatory to Team Members, Team Leaders, Assistant Restaurant Managers, and Restaurant General Managers across both our KFC corporate and franchise businesses, during the year. Cross-functional meetings were held to discuss progress in our commitment to de-risk modern slavery during 2023, and a formal governance structure for overseeing the business’ action plan in this regard will be established in 2024 and reported in the 2024 Modern Slavery Statement.
¹ High Risk of Trafficking in Agriculture ; ² UNODG.org 'COVID Impact on Trafficking' ; ³ Walk Free Global Slavery Index 

Our Organisation and Our Business 
KFC was introduced to Britain in 1965 when our first restaurant opened in Preston. There are now over 1,000 KFC restaurants in the UK and Ireland and around 33,000 team members in our business. There are over 30,000 KFC restaurants in more than 145 countries and territories around the world, including in Africa, Asia and Oceania, South America, the Caribbean, Europe, the Middle East and North America. KFC is operated on a part equity, part franchised model and as of December 2023, 99% of KFC restaurants across the world are franchise operated. 

KFC is part of Yum! Brands, Inc. (“Yum! Brands”) which is based in Louisville, Kentucky. Yum! Brands and its subsidiaries or franchisees operate a system of over 58,000 restaurants in more than 155 countries and territories under the company’s four concepts – KFC, Taco Bell, Pizza Hut and The Habit Burger Grill. In 2022, the company was named to the Dow Jones Sustainability Index North America for its commitment to citizenship and sustainability across its restaurant business. Yum!’s Global Citizenship & Sustainability Strategy, called its Recipe for Good, is the company’s roadmap for social responsibility, risk management and sustainable stewardship of its people, food and planet. Details of Yum!’s commitments on human rights are outlined here. 

We understand that modern slavery - whether slavery, servitude, forced or compulsory labour, human trafficking or otherwise - is a continual and growing global issue that can be found especially in the sector in which KFC operates. At KFC, we have a zero-tolerance approach on, and condemn, modern slavery and human trafficking of any kind within our business and our supply chain. 

We are committed to both trauma informed and a robust response in the event of an incident, and also to utilising our scale of business to minimise the risk of modern slavery both within our business operations and the communities we operate within.  

2. OUR SUPPLY CHAIN 

We are committed to conducting our business with the highest degree of integrity. We seek to assure the quality of our products and the wellbeing of the people working in our restaurants and supply chain by maintaining a close, stable relationship with our franchisees and our direct suppliers, managing performance and the continuous improvement of quality, service, cost, innovation and risk management. 

Direct suppliers mean suppliers of goods that are core to our business, namely food, drink and packaging, but excludes suppliers of branded products. With regards to recruitment practices within our supply chain, we rely on our direct suppliers’ good ethical business practices. Open communication with our direct suppliers is critical for identifying and resolving any supply chain issues so that together we can respond rapidly and fully to ethical issues. 

We have processes for the sourcing and management of our direct suppliers in order to minimise risk to our brand, the environment and the communities that our restaurants and supply chains impact. Further details of what these processes include can be found in the due diligence section of this document. 

We carefully select our direct suppliers, developing long-term relationships with them that give us the confidence that a global brand like KFC demands in its supply chain. We are aware that parts of our supply chain are predominately resourced with a seasonal, low-paid, unskilled workforce and that these industries can be at risk from the exploitation of workers and modern slavery. Whilst we are confident that our sourcing practices minimise this risk, we know that risk can only be reduced if we are continually vigilant and demanding on our supply chain. Inherent supply chain risk mapping conducted by our modern slavery consultants, Stop The Traffik, in 2021, indicated 59% of our direct suppliers were either high risk or relatively high risk of modern slavery based on the types of goods or services they provide. KFC responded to this information by ensuring 100% of all direct suppliers were registered with SEDEX which has been achieved in 2023. Further risk mapping of the supply chain will be conducted. 

Our Policies  
One of the ways we address modern slavery risks in our supply chains is through our Sourcing Code of Practice (the “Sourcing Code”), which incorporates the Yum! Supplier Code of Conduct and is governed by the KFC Western Europe Ethical Sourcing Policy, the Sustainable Sourcing Policy, the Farm Animal Welfare Policy, and the Product Integrity Policy. The Sourcing Code sets out defined ethical standards we require direct suppliers to follow as part of their agreement to supply KFC. It requires all direct suppliers to uphold internationally agreed standards of labour, comply with national laws, and work to continually improve workplace and employment standards. All our direct suppliers are required to comply with the Sourcing Code. Regularly reviewing our policies enables us to address any growing risk areas and ensure our policies are robust and mitigate the risk of modern slavery. 

Labour Standards  
Our labour standards are set out in our Western Europe Ethical Sourcing Policy, which is reviewed and updated where needed by the KFC Western Europe Head of Responsible Sourcing & Regulatory Compliance. If a supplier is found to be in breach of these policies an investigation and appropriate corrective action will be taken. We are proud to say that there were no reports of suppliers being in breach of the Ethical Sourcing Policy in 2023. 

We require our direct suppliers to provide employment that is freely chosen, to ensure that there is no forced or bonded labour and to have in place policies, systems, risk assessment, training, and measurements in our attempts to ensure no forced labour or slavery exists. We also require that our suppliers allow employees the freedom to associate, organise and join a trade union (or collective bargaining group acting for them) in a lawful and peaceful manner without penalty or interference. Suppliers are required to treat all workers with dignity and respect, and never allow or condone any actions such as abuse or harassment. Suppliers are also required to comply with all applicable wage and hour laws and regulations. 

Furthermore, we support the Ethical Trading Initiative (ETI) Base Code of Conduct, which sets out the labour standards we expect our suppliers to meet. We do this through our work with SEDEX. SEDEX leverages the Ethical Trading Initiative Base Code to assess risk at each supplier site, across four main areas — labour standards, health and safety, business ethics and environment. It uses a combination of inherent industry and country-related risk factors, self-assessments, and third-party, ethical audits to determine both potential and actual exposure. Gaining this additional visibility further strengthens our confidence in our supply chain. 

Due Diligence, Risk Assessment and Management  
We recognise the importance of being fully aware of the ethical practices and any associated risks in our supply chain. As part of their contract with KFC, direct suppliers are expected to establish management systems for delivering compliance to KFC policies and to maintain records demonstrating this. Suppliers must take appropriate steps to ensure that: 

• The Sourcing Code is communicated to all relevant employees 
• There is regular engagement with relevant management teams about the need for compliance
• Appropriate training on the Sourcing Code is provided to key employees 
• Processes and systems are in place to provide means for workers to report or discuss non-compliance confidentially. 

KFC expects any non-compliance with the Sourcing Code to be reported by our direct suppliers so that we can work together to create a time-measured plan to correct the situation as quickly as possible. 

In addition, our direct suppliers are required to register with SEDEX, an ethical data exchange that ensures that ethical standards are monitored and measured. All direct suppliers are required to complete a risk assessment, including a Self-Assessment Questionnaire and undertake independent third-party audits when required. This provides KFC with an overview of the level of risk posed by each supplier and allows us to focus on the areas of greatest risk. In any instances where we feel there is an unacceptable risk, we will contact our direct suppliers in writing, reminding them of our values and ethical standards and reiterating the expectations we have when working with them. We contractually reserve the right to audit our direct suppliers if the need arises.

3. OUR OPERATIONS 

We recognise that team members working for both KFC UK headquarters, KFC-owned restaurants and franchisee-owned restaurants must be treated fairly and with respect. We ensure that we comply with all applicable wages, benefits and hour laws and regulations, and our franchisees are contractually obliged to do the same. We pay fair wages in line with the norms for the industry and market, do not require anyone to work excessive hours and overtime is voluntary. 

We are confident that our internal centralised human resources processes for recruitment minimise the risk of modern slavery or human trafficking taking place within KFC itself. These include Right to Work documentation checks, payroll checks that bank account matches to employee name and training on signs of human trafficking through modern slavery training for all 30,000 employees. 

Our Internal Policies 
We know that our employees are crucial to helping ensure that modern slavery risk is removed from our operations and supply chain. We have the following policies that support our statement and position on modern slavery and human trafficking: 

• Business Conduct Ethics Policy; 
• Employee Code of Conduct; 
• Grievance Policy; 
• Equal Opportunities Policy; and 
• Whistleblowing Policy (which is included in our Equal Opportunities Policy) - our employees have a duty to report any ethical concerns so that we can take appropriate action. We know that this can be personally challenging, so we have provided and publicised a confidential helpline called “Speak Up” to encourage our employees to whistle blow in safety. Employees are given training on Speak Up and there are posters in team areas in restaurants providing information on the service. 

Policies are available for all employees via KFC’s internal system. 

Training 
KFC has an annual compliance training programme in relation to our policies. We are proud of our training standards, and we continue to assess our compliance training programme to see where we can make further improvements. 

An assessment of our training programme in 2021 showed the need to expand our training modules to include modern slavery and sexual exploitation training to all our in-restaurant colleagues. In 2022, KFC developed a new mandatory training series with Stop the Traffik containing modules on modern slavery, human trafficking, child criminal exploitation and child sexual exploitation. We included training on child criminal exploitation and child sexual exploitation because of the demographics and age of our workforce. The training programme was rolled out to Team Members, Team Leaders, Assistant Restaurant Managers, and Restaurant General Managers across both our KFC corporate and franchise businesses. Between 01/01/23 and 31/12/23, we recorded a total of 25,952 unique completions. Since its launch, the training has been included in our mandated induction process, ensuring that all new team members complete it when they start work at KFC. This process ensures that every individual working at KFC is trained on these issues.

4. OUR OPERATIONS 

To measure our effectiveness and progress on the issues of modern slavery and human trafficking, we have created Key Performance Indicators (KPIs), and have reported on our progress on each of our KPIs as set out below:

This statement has been approved by the board of directors of Kentucky Fried Chicken (Great Britain) Limited. 

Meghan Farren 
Director, Kentucky Fried Chicken (Great Britain) Limited 
23 December 2024