Free Enterprise - The FindLaw Small Business Law Blog

Chicago KFC Can't Market Muslim-Friendly Chicken, Court Rules

Here's a court case made for the drive-through. A federal court in Chicago has ruled that Afzal Lokhandwala, owner of several Kentucky Fried Chicken franchises in the area, can keep selling halal chicken at his restaurants -- he just can't advertise it as halal chicken. The case offers a good example of how franchise agreements can control certain aspects of a franchisee's business and the problems that can pose for entrepreneurs.

You Can Sell Halal Chicken

As we reported when the suit was filed, Lokhandwala has been selling halal chicken at his KFC franchises for years, much to the delight of his many Muslim chicken-eating customers.

Under Islamic law, halal meat must come from permitted animals and be properly prepared. And Lokhandwala's carved out a nice customer base by doing so, estimating that he'll lose approximately $1 million a year by not calling his chicken halal.

There's no dispute that Lokhandwala's chicken was halal. He even registered as a dealer in halal with the Illinois Department of Agriculture. Rather, the dispute went to court when KFC cracked down on Lokhandwala's ability to advertise his chicken as halal.

You Just Can't Call It Halal Chicken

This isn't a feather-brained decision either. As Judge John Blakely of the U.S. District Court for the Northern District of Illinois ruled, KFC has complete control over advertising and marketing material under the terms of the franchise agreement. And, much to Lokhandwala's loss, the franchise agreement allowed KFC to enforce any term that it may have previously waived at any time.

Any aspiring franchise owner should closely study the terms of a franchise agreement. When in doubt, checking with a local lawyer can help.

Related Resources