View Full Version : KFC short-changes Ghanaian businessman

13th March 2011, 02:39 PM
Mr Benjamin Amponsah, a Ghanaian
Entrepreneur and Chief Executive Officer of Canada-based Pas Foods
International, has accused Kentucky Fried Chicken (KFC), a global fast
food chain, of short-changing him in a business transaction in Ghana.

“Why should KFC renege on an agreement we clenched in Ghana and
rather give me a raw deal,” he told the Ghana News Agency (GNA) in an

“KFC has unfairly awarded a contract promised me, and for which
I have invested a lot of time and resources,” he stressed.

Mr Amponsah, said he secured the deal with KFC, to partner the
company in Ghana by establishing a chain of fast food joints.

He said as part of the agreement his company was tasked to
develop the local market and establish the infrastructure for the
establishment of the venture.

Mr Amponsah pursued his entrepreneurial ambition by inviting
representatives of the US-based firm into the country.

He said after initial discussions with KFC, he and his partner
from Canada invested in architectural designs and other assignments
towards the project.

It was agreed that Mr Amponsah would develop the market and
provide the infrastructure for the fast food chain.

An architect was therefore engaged to design the KFC restaurants
while sites were acquired to build the food chain throughout the

Mr Amponsah accomplished all the prerequisite formalities and
even gave a copy of his business plan to the KFC officials who he
hosted at a reception in Ghana, which was attended by bankers,
property owners and other stakeholders.

However, KFC made a u-turn by rather partnering a South African
investor in the food market who wanted to enter the Ghanaian market
with the excuse that Mr Amponsah was not qualified for the project.

Contrary to this assertion Mr Amponsah has a stake in a number
of fast food chain in North American including KFC restaurants.

A legal team representing Mr Amponsah told the GNA that whoever
comes to Ghana to put the ideas of their client into action could be
sued in a commercial court for breach of contract and trade secrets or
be made to negotiate for a fair compensation.

A document presented to the GNA by the legal team said the issue
of whether there was a contract between the two parties does not arise
because there were negotiations towards the award of the franchise of

“The case law in Ghana shows that a contract which is subjected
to a further contact is no contract.

“We can of course argue that the initial contract was a
complete contract in itself.

“It required Mr Amponsah to do certain things to his
detriment and to the advantage of the partner who was to reward him by
partnership and sharing profit in a company to be established in

“He performed them and therefore if KFC failed to give him
the contract in the end, then he is entitled to compensation for the
initial contract on the basis of work performed. That is what we call
quantum meruit basis,” the document said.

Quantum meruit is the measure of damages where an express
contract is mutually modified by the implied agreement of the parties,
or not completed.

The document said there was also an issue with trade secrets
provided by Mr Amponsah including the conditions of the Ghanaian
market, which was captured in the business plan.

“There seems to be a cause of action here because the KFC
representative got his ideas about the Ghana market and then used them
as a springboard to the detriment of Mr Amponsah.”

The legal team has therefore threatened to take legal action
against the Management of KFC for allegedly violating the business
contract. Litigation will however be the last option, after mediation
has failed.

However, an official of KFC, Mr Keith Warren has dismissed the
claims, saying “Pas International was part of the application process
and its application was declined.

“We will like to categorically state that there was and there is
no agreement with Pas International in place,” Mr Warren said.

Pas Foods International of Canada, which has a stake in a number
of fast food chains in North America, is working towards entering
other markets.

KFC Corporation is the world's most popular chicken restaurant
chain and is ranked number 239 on the Fortune 500 List, with revenues
in excess of $11 billion in 2008.