Colonel Sanders' historic restaurant is for sale and KFC isn't happy

A bid to sell a historic restaurant and mansion once owned by Colonel Sanders and his wife has struggled to take flight — partly because the deal is ruffling the feathers of KFC’s corporate owner, The Post has learned.

The Claudia Sanders Dinner House — a 63-year-old eatery in Shelbyville, Ky. that draws locals and tourists alike with its fried chicken, cole slaw and homemade pies — was put up for sale in June. Some interested buyers say they want to franchise it and expand its footprint outside the town for the first time.

But the prospect of a rival fried-chicken chain that uses the Sanders name has attracted the attention of KFC’s parent YUM! Brands, whose legal team promptly submitted a filing to the US Patent & Trademark Office days after the properties were put up for sale. 

The filing seeks to reinforce protections of KFC trademarks, including “Colonel Sanders’ Original Recipe,” “Col. Harland Sanders” and “It’s Finger Lickin’ Good.”

“It’s a very unique situation,” said Jonathan Klunk of Six Degrees Real Estate, which has been hired to sell the properties. “We are selling Claudia and she doesn’t have as much name recognition 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.

Col. Harland Sanders married Claudia in 1949 and opened the Claudia Sanders Dinner House for his wife in 1959 on a 3-acre property that also includes their 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 age 94. Claudia died in 1994 when she was 90. 

The property has been in the hands of Sanders family friends Tommy and Cherry Settle since the 1970s. Cherry, who is 78, was a hostess at the restaurant when she and Tommy, now 80, bought the property from the Sanders. Tommy had run a plant that supplied the restaurant with hams. The couple run the restaurant and currently live in Blackwood Hall but want to retire. 

YUM! did not respond to multiple calls and emails for comment, but KFC is famously 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 that the Dinner House has “no connection to the KFC recipe.”

The Settles had a run-in with YUM! in 2001 when Tommy found a leather-bound datebook from 1964 in the basement of Blackwood Hall that belonged to Col. Sanders 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 private until the company could vet it. The lawsuit was dropped when YUM! claimed the recipe wasn’t even close to the original.

YUM!, a $6.5 billion conglomerate headquartered in Louisville, Ky. that also owns Pizza Hut and Taco Bell, has not expressed an interest in buying the restaurant brand or property, Klunk said.

The Settles are seeking $9 million for their intellectual property as well as the two buildings, the three-acre lot and some memorabilia including the first KFC flag and bucket and a birthday letter to Sanders from President Richard Nixon. A 2013 auction of the Colonel’s memorabilia that included one of his white suits fetched $21,510 and his 1973 Kentucky driver’s license went for $1,912.

Six Degrees is now considering unbundling the estate, selling each piece separately to attract more buyers, Klunk said.

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

So far, interested buyers include local and large restaurant groups, serial entrepreneurs who have global businesses and even some local bourbon brands, according to the real estate firm.

One potential buyer talked about turning the Colonel’s house into a high-end Airbnb rental, while a couple of Kentucky bourbon brands are weighing expansions into comfort food, Klunk said. Others are exploring licensing its popular dishes, especially its famous yeast rolls, for sale in supermarkets, Klunk said.

But none of the bidders are moving forward before talking to YUM! about what they can do with the brand without inviting litigation.

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

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

The Claudia Sanders Dinner House has been a mainstay in Shelbyville, Ky. since 1959, even serving as the first KFC headquarters for a time. Its menu includes boxes of chicken wings, thighs, and tenders, yeast rolls, creamed spinach, cole slaw and homemade pies.

It’s one of the few establishments in the area that has a liquor license. Locals celebrate holidays, weddings and reunions at the grand, two-storied pavilion that features wide patios. 

Even international tourists, especially from Japan – where KFC is a staple of Christmas dinners – have posted images of themselves roaming the vast parking lot between the dinner house and Blackwood Hall.

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

That could change – but it won’t be easy to slap the Sanders name on other restaurants selling chicken, said Brad D. Rose, a trademark attorney at Pryor Cashman who isn’t involved in the case.

“Whoever is going to take on the Claudia Sanders name is probably in for an uphill and expensive battle,” Rose said.

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