MODERN SLAVERY STATEMENT 2020

This statement has been published in accordance with the Modern Slavery Act 2015. It sets out the steps taken by Kentucky Fried Chicken (Great Britain) Limited and other relevant group companies1 (“KFC” or “we”) for the financial year ended 27 December 2020 to prevent modern slavery and human trafficking in its business and supply chains. 

Our previous Modern Slavery Statements can be found here: 2019 Statement ; 2018/17 Statement; 2016/17 Statement.

Our Organisation and Our Business

KFC was introduced to Britain in 1965, when our first restaurant opened in Preston. There are now around 950 KFCs in the UK and Ireland and over 27,500 team members in our business.  There are over 23,000 KFC outlets in more than 135 countries and territories around the world. KFC is operated on a part equity, part franchised model and as of December 2020 99% of KFC restaurants across the world are franchise operated.  

KFC is part of Yum! Brands, Inc. (“Yum! Brands”) whose other brands include Pizza Hut and Taco Bell. Yum! Brands based in Louisville, Kentucky has over 50,000 restaurants in more than 150 countries and territories. In 2019, Yum! Brands was named to the Dow Jones Sustainability North America Index and in 2020, the company ranked among the top 100 Best Corporate Citizens by 3BL Media. 

We understand that modern slavery - whether slavery, servitude, forced or compulsory labour or human trafficking - is a continual and growing global issue that can be found especially in the agri-food sector in which we operate. At KFC, we have a zero-tolerance policy on modern slavery and human trafficking of any kind within our business and our supply chain. We have a responsibility to minimise any risk of this kind in any part of our business operations and in the event of an incident, we will address this promptly with all relevant parties concerned. 

1. 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. 

While we are confident that our internal centralised human resources processes for recruitment minimises the risk of modern slavery or human trafficking taking place within KFC itself, our supply chain relies on our suppliers’ good ethical business practices. Open communication with our suppliers is critical for identifying and resolving any supply chain issues so that together we can respond rapidly and fully to ethical issues. Our supply chain teams have a duty to report any suspicions of poor ethical behaviours by a supplier immediately. 

We have processes for the sourcing and management of our suppliers in order to minimise risk to our brand, the environment and the communities that our restaurants and supply chains impact.  

We carefully select our direct suppliers, developing long term relationships with them that gives 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, particularly in relation to our direct suppliers, we know that risk can only be reduced if we are continually vigilant and demanding on our supply chain. In any instances where we feel there is unacceptable risk, we will contact our 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. 

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 our Ethical Sourcing Policy and Yum! Brands Supplier Code of Conduct. The Sourcing Code sets out defined ethical standards we require suppliers to follow as part of their agreement to supply KFC. It requires all 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 contractually obliged to comply with the Sourcing Code, which is reviewed annually. 

Labour Standards

We require our suppliers to provide employment that is freely chosen, ensure that there is no forced or bonded labour and have in place policies, systems, risk assessment, training and measurements 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.  

Further, we support the Ethical Trading Initiative (ETI) Base Code of Conduct, which sets out the labour standards we expect our suppliers to meet.

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.  

Pursuant to the Sourcing Code, suppliers are expected to:

• establish management systems for delivering compliance with the Sourcing Code and to maintain records demonstrating this;
• take appropriate steps to ensure that the Sourcing Code is communicated to all relevant employees, appropriate training is provided to employees, and that systems are in place for reporting any non-compliance;
• maintain written records of all subcontractors and companies in their supply chain involved in KFC products are provided with the Sourcing Code and confirm, in turn, their compliance with it;
• report any non-compliance so that we can work together to create a time-measured plan to correct the situation as soon as possible; and
• permit KFC representatives, including third party auditors, to access their documentation, management and workers to determine compliance and progress. .

In addition, all direct suppliers are required to register with SEDEX, an ethical data exchange which ensures that ethical standards are monitored and measured, and best practice is shared across the industry. All direct suppliers must complete the required risk assessment and undertake independent third-party audits when required. This provides us with an overview of the level of risk posed by each supplier and allows us to focus on the areas of greatest risk and greatest potential benefit and develop corrective action plans.  

2. 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. 

Our Policies 

We have general policies and procedures that support our statement and position on modern slavery and human trafficking, such as our Whistleblowing Policy and Business Conduct Policy. We know that our employees are crucial to helping ensure that modern slavery is removed from our operations and supply chain. Our employees have a duty to report any ethical concerns so that we can take steps to stop it happening. We know that this can be personally challenging, so we have provided and publicise a completely confidential helpline called “Speak Up” to encourage our employees to whistleblow in safety. Further, we have created a centralised reporting mechanism for team members in KFC-owned and franchisee-owned restaurants to report any concerns regarding modern slavery, which we expect to roll-out to restaurants this year. 

Training

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

Achievements in 2020

In 2020, we have: 

• commissioned an external review of our human resources policies to determine best practices; 

• completed salary benchmarking for our restaurant management roles to ensure we are paying fairly and according to the location of the role; 

• issued our Ethical Sourcing Policy including robust provisions related to labour practices; 

• continued to assess direct supplier risks and follow up with those where concerns are raised; and 

• established a cross functional governance team to manage risk and enhance KFC’s understanding of modern slavery

Next steps

In 2021, we will:

• collaborate with a third-party expert in modern slavery risks to further identify and analyse risks to our operations and supply chains and act upon risks identified; and 

• review how we measure and report on modern slavery performance

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

Paula MacKenzie 

General Manager, Kentucky Fried Chicken (Great Britain) Limited 

14 December 2021