Colonel Sanders’ historic restaurant is up for sale, and KFC isn’t happy

A bid to sell the historic restaurant and mansion once owned by Colonel Sanders and his wife has struggled to get off the ground — in part because the deal is ruffling the feathers of KFC’s corporate owner, The Post has learned.

Claudia Sanders Diner – Ky. The 63-year-old eatery in Shelbyville, which attracts locals and tourists alike with its fried chicken, coleslaw and homemade pies, opened in June. Some interested buyers say they want to franchise it and expand its footprint outside the city for the first time.

But the prospect of a rival fried chicken chain using the Sanders name caught the eye of KFC parent YUM! A few days after the properties went up for sale, Brands’ legal team immediately filed an application with the US Patent and Trademark Office.

The 5,000-square-foot former principal residence of Colonel Harland Sanders in Shelbyville, Ky.
Andrew Kung Group

The filing seeks to strengthen protection of KFC trademarks, including “Colonel Sanders’ Original Recipe,” “Col. Harland Sanders” and “This Finger Licking Good”.

“It’s a very unique situation,” said Jonathan Klunk of Six Degrees Real Estate, which was hired to sell the properties. “We’re selling Claudia, and she’s not as well-known as her husband, but a buyer can’t describe her without mentioning both her husband and KFC.”

Colonel Harland Sanders
Sanders lived out his final years at Blackwood Hall before his death in 1980 at the age of 94.

Colonel Harland Sanders married Claudia in 1949, and in 1959 opened the Claudia Sanders Diner House for his wife on 3 acres, which also included his 5,000-square-foot private residence known as Blackwood Hall. Sanders lived out his final years at Blackwood Hall before his death in 1980 at the age of 94. Claudia died in 1994 at the age of 90.

The property has been owned by Tommy and Cherry Settle, friends of the Sanders family, since the 1970s. Cherry, 78, co-owned the restaurant with Tommy, now 80, when they bought the property from Sanders. Tommy ran a plant that supplied the restaurant with ham. The couple run a restaurant and currently live in Blackwood Hall but want to retire.

YUM! did not return multiple calls and emails for comment, but KFC is secretive about its fried chicken recipe, Sanders’ original 11 spices and herbs. Klunk says there are “a lot of similarities” between the restaurants’ menus, but the Lunch House has “nothing to do with the KFC recipe.”

Settles encountered YUM! In 2001, when Tommy found a leather-bound history book in the basement of Blackwood Hall that belonged to Colonel Sanders in 1964 and contained a list of 11 herbs and spices. Settle wanted to authenticate the recipe so he could sell it, according to reports at the time, but YUM sued him to keep it secret until the company could verify it. When it comes down to it, YUM! claimed that the recipe was not close to the original.

YUM!, a $6.5 billion conglomerate headquartered in Louisville, Ky., which also owns Pizza Hut and Taco Bell, has said it is not interested in buying the restaurant brand or property, Klunk said.

Settles is seeking $9 million for his intellectual property, as well as two buildings, three acres of land and some memorabilia, including the first KFC flag and bucket and a birthday letter from President Richard Nixon to Sanders. In 2013, memorabilia, including one of the colonel’s white suits, sold for $21,510, while a 1973 Kentucky driver’s license sold for $1,912.

Klunk said Six Degrees is now considering splitting up the property, selling each piece separately to attract more buyers.

The interior of the property.
One of the dining rooms at the Claudia Sanders Dinner House.
Andrew Kung Group

According to the real estate firm, interested buyers so far include local and major restaurant groups, serial entrepreneurs with global businesses and even some local bourbon brands.

One potential buyer has talked about turning the Colonel’s home into a high-end Airbnb rental, while several Kentucky bourbon brands are considering turning the expansions into comfort food, Klunk said. Klunk said others are exploring licensing its popular foods, particularly its popular yeast rolls, for sale in supermarkets.

But none of the bidders is moving forward without talking to YUM! about what they can do with the brand without inviting a lawsuit.

“If you want to use the Claudia Sanders brand, you need to have a team of intellectual property lawyers,” Klunk tells potential buyers.

Memoir of Colonel Sanders.
So far, interested buyers include local and large restaurant groups, serial entrepreneurs with global businesses, and even some local bourbon brands.
Andrew Kung Group

The Claudia Sanders Diner has been a staple in Shelbyville, Ky., since 1959, even serving as the original KFC headquarters for a time. Its menu includes chicken wings, thigh and tenderloins, yeast rolls, creamed spinach, cole slaw and homemade pies.

It is one of the few establishments in the area with a liquor license. Locals celebrate holidays, weddings and meetings in the magnificent, two-story pavilion with spacious verandas.

Even international tourists, especially those from Japan, where KFC is a staple of Christmas dinners, have posted pictures of themselves strolling through the wide parking lot between the eatery and Blackwood Hall.

The restaurant has coexisted peacefully with the fast-food empire because Sanders and Settles have never aggressively promoted the brand or promoted it on social media.

That may change — but slapping the Sanders name on other restaurants that sell chicken won’t be easy, said Brad D. Rose, a trademark attorney at Pryor Cashman, who is not involved in the case.

“Whoever gets the name Claudia Sanders is probably going to have an uphill and expensive battle,” Rose said.

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