• Lawsuit Targets KFC Oprah Promo
  • July 15, 2009
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • A lawsuit has been filed over a recent KFC promotion announced on Oprah, in part because the promotion may have actually been too successful. The plaintiffs, who filed suit in California state court, are seeking class action status.

    The allegations made against KFC and its parent company in the complaint include claims for false advertising, fraud, and unfair business practices. It stems from a promotion that began last month when Oprah announced a coupon offer from the chain, good for a free meal consisting of two pieces of KFC’s grilled chicken, sides, and a biscuit. Coupons were available through Oprah’s Web site. Sixteen million coupons were downloaded, a number that KFC did not anticipate, as franchises across the U.S. ran out of the promised chicken.

    To deal with the tremendous demand, KFC first extended the promotion for an additional day and transferred the downloadable coupon to its own site (from Oprah’s). On May 7, with demand still high, KFC announced that it would not honor the coupons that day and promised a rain check. According to the complaint, a KFC press release explained that to get the rain check, which was redeemable for a two week period, consumers needed to present or mail their downloaded coupons with their rain check request to a KFC outlet by May 19.

    Although KFC responded quickly to the unanticipated demand, adding a free Pepsi to the rain check offer and maintaining Oprah’s support, the complaint asserts that KFC should have been able to do more to accommodate consumers who spent money to print out and travel to a KFC in anticipation of a free meal. It also alleges that the terms and conditions of the promotion subsequently imposed by KFC were more onerous than the original offer, and as such will deprive many consumers of their free meal. It describes the promotion as a “classic example of a bait and switch” and seeks monetary, injunctive, and declaratory relief.

    Why it matters: It’s almost a given that a big promotion that suffers even a small hiccup will result in someone filing suit. As a result, before launching a large scale promotion, companies should include in their cost-benefit analyses the costs – legal, settlement, and adverse publicity – of possible ensuing lawsuits. In addition, for nationwide televised promotions, especially those that use the power of Oprah, companies should carefully determine not only what the estimated response will be, but should also have a contingency plan if the response is overwhelming.