A union has demanded that the fast-food franchise stop degrading its staff after the incident involving the R2 Add Hope targets, a customer-based donation that goes to nonprofits.
Apology to KFC and readers: In its story “Hopeless: union demands that KFC stops degrading employees”, first published in DM168 on 29 June 2024, Daily Maverick made certain errors, including an error about financial information in KFC’s Add Hope annual report. These were not picked up in the editing process. Daily Maverick apologises to KFC and its readers for these oversights.
KFC South Africa has also complained that Daily Maverick failed to pose all allegations included in the article, which focused on KFC’s Add Hope campaign, to the company. The responses have therefore been added to the end of this article, together with a note reflecting the corrections that have been made to the article. Daily Maverick apologises to KFC and its readers for these oversights.
KFC’s responses are added at the end of this article.
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A written warning was recently circulated on social media showing a KFC South Africa employee receiving a warning for failing to “meet the Add Hope target”.
KFC South Africa investigated and found the franchise owner carried out the disciplinary action. They stated on social media that they “firmly oppose the use of the Add Hope programme as a performance measure”.
“All of our franchise partners and staff have been reminded and we will continue to reinforce this message throughout our system through consistent communication and staff training,” KFC South Africa told Daily Maverick.
Worker and union perspectives
Daily Maverick interviewed a former KFC employee, a 36-year-old man who worked at an East London branch for six years. He said there was pressure from management to convince customers to add R2 to their bills.
“Written warnings were only given if your till came up short often, but they would give verbal warnings if you missed the target to add R2 for Hope donations,” he explained. He said if you struggled to convince customers to donate within a month at the cash register you would be transferred to another duty, either preparing chicken or serving.
“There was a lot of pressure to get those R2s. In my branch they would ask why you are missing the target and tell you to get new strategies to get people to pay, such as to ask: ‘How many kids would you like to feed today?’ Customers would be very rude when asked. That’s why most people didn’t like to ask,” he said.
Staff would be reprimanded in front of others, he added. Working conditions in the fast-food industry are notoriously tough, but the poor treatment of staff made things worse.
Another KFC employee, from KwaMashu in KwaZulu-Natal, a 28-year-old woman, told Daily Maverick: “There is always pressure because customers don’t believe the donations get to the underprivileged. It’s only 10% who believe. Customers argue with you… and ask a lot of questions. The management sets daily targets to meet for the R2s, and it is hard to meet those targets.
“The working conditions are hard because we are dealing with people. There is always some sort of drama because of this [R2].”
The Food and Allied Workers’ Union (Fawu), “strongly condemns” the written warning incident.
“It is completely unacceptable and incomprehensible in the first place for the company to demand of employees to reach a specified Add Hope quota, knowing very well that its employees have absolutely no control over customers’ decision to donate or not,” Fawu said.
Although Fawu appreciates the company’s investigation into the specific matter, it “demands that KFC create clear policies and regulations for their partners, management and employees regarding the Add Hope campaign to avoid future embarrassment and degrading treatment of its employees”.
Lesetja Minyku, the national negotiator for the fast-food sector of Fawu, told Daily Maverick: “KFC management expects employees to reach a target of 30 R2 donations in exchange for a voucher for Shoprite. In other cases the best performers are motivated with ice cream.”
He added that workers in some outlets rejected the warnings for not reaching Add Hope targets. Asked about working conditions, KFC South Africa said it holds “the highest respect for the labour laws… and complies with all government norms and regulations”.
How does the programme work?
The KFC Add Hope 2023 annual report explained that R2 donations, along with KFC’s contributions, go into the KFC Social Responsibility Trust, and are donated to more than 130 nonprofit organisations. The trust is a separate public benefit organisation, and is independently audited by KPMG.
Technically, customers could get a section 18A certificate, an official document that serves as evidence for their R2 donation, which could be tax-deductible. Because you can get this certificate, it means that the R2 goes to a public benefit organisation which would be subject to SARS audits to demonstrate that they carry out a legitimate public benefit activity.
“The R2 donations do not go into the KFC bank account. They go straight into the Add Hope Trust bank account. This means that KFC’s company donation never mixes with the R2,” KFC SA told Daily Maverick.
At the 28 February 2022 year end, the KFC Social Responsibility Trust had total assets of R103 million, according to its statement of financial position.
In that financial year, donations totalled R88.3 million and disbursements to 130-plus partner organisations R89.6 million, according to the statement of comprehensive income.
Cash on hand at the beginning of the year was R28 million, reducing by R9 million to R19 million at the end of the year, according to the statement of cash flows.
“For the record, Add Hope maintains strategic reserves to ensure its sustainability. During the Covid-19 pandemic, for example, its reserves enabled it to keep feeding hungry children when the trust had no income,” says KFC SA.
It is also unclear whether this money is used towards creating healthy meals. The Add Hope website says: “It encourages KFC customers to add R2 to their bills so that hungry and malnourished children can be supported with nutritious meals.”
The 2024 Add Hope impact report speaks of “balanced nutritious meals daily with menus developed by dieticians to ensure optimal development of the children”, with no mention of the meal’s actual composition.
Marketing?
A case study of KFC found that the campaign has increased public trust in the brand.
“It commands awareness levels of over 75% among consumers, which leads to increased affinity for KFC. Consumers say that they’re more likely to buy from KFC because of Add Hope.”
A study comparing the online marketing techniques of food and beverage companies’ websites in six countries has shown that “companies showcase healthier products in wealthier countries and advertise their philanthropic activities in lower-income countries”.
This means poorer places get fewer healthy options on the menu, but they get marketing that relies on charity-oriented campaigns to entice people to choose them over the competition. DM
Following on a complaint from KFC, certain amendments have been made to the body of this article, including clarifying that a public benefit organisation would be a subject to a SARS audit to demonstrate that they carry out a legitimate public benefit, instead of stating that this was the case, “at least according to Sars”.
The paragraphs of the story related to the financial position regarding the KFC Social Responsibility Trust have been amended in their entirety, to reflect the accurate financial position recorded in the 2021/22 annual report (see above). Daily Maverick has also changed the subheading from ‘Sneaky Marketing’ to ‘Marketing?’.
KFC South Africa responds
Daily Maverick: Given the allegations that previous employees made about individual franchises pressuring employees to get R2s for the Add Hope Campaign, whether through verbal reprimands, moving to another duty other than till duty if they did not meet the targets, or motivating them through vouchers and ice cream, as a Fawu representative claimed, as well as the Union’s ask that clear policies be made in each franchise in their public media statement made on June 21. How does KFC respond to the issue of pressuring workers to reach these targets?
KFC South Africa: The entire article is based on commentary from FAWU. The journalist did not factcheck with KFC to ascertain if FAWU is a representative union of all KFC employees across South Africa. While some employees of KFC franchisees may be FAWU members, FAWU is not a representative union of KFC employees across South Africa. As such, we recommend that FAWU addresses its concerns directly with the franchised businesses where it has recognition agreements.
Daily Maverick: The 2021/22 annual report noted that donations totalled about R103-million, but only R9-million of that appears to have been disbursed by 28 February 2022. This disbursement is listed as ‘cash flows from operating activities’ and does not specify which amounts go to which charity (or whether these are charitable contributions at all given the generic catch-all language that is used). If indeed 130 nonprofit organisations are supported, they would each receive only about R69,230.
KFC South Africa: Describing how Add Hope donors can obtain section 18A certificates to claim a tax refund, the article states: “Because you can get this certificate, this proves that the R2 goes to a public benefit organisation, at least according to the revenue service.” The clear implication of the last seven words is that the KFC Social Responsibility Trust, which runs Add Hope, is either masquerading as a public benefit organisation, or that customers’ R2 Add Hope donations do not go to the Trust. This serious accusation, which also implicates the trust’s auditor, KPMG, in alleged wrongdoing, is offered with no evidence and did not feature in the reporter’s questions sent to KFC.
The article then notes: “The 2021/22 annual report noted that donations totalled about R103-million, but only R9-million of that appears to have been disbursed by 28 February 2022. This disbursement is listed as ‘cash flows from operating activities’ and does not specify which amounts go to which charity (or whether these are charitable contributions at all given the generic catch-all language that is used). If indeed 130 nonprofit organisations are supported, they would each receive only about R69,230.”
This paragraph is based on a fundamental misreading of the financial information in the annual report. The facts set out in the report are as follows:
- At the 28 February 2022 year end, the KFC Social Responsibility Trust had total assets of R103 million, according to its statement of financial position.
- In that financial year, donations totalled R88.3 million and disbursements to 130-plus partner organisations R89.6 million, according to the statement of comprehensive income.
- Cash on hand at the beginning of the year was R28 million, reducing by R9 million to R19 million at the end of the year, according to the statement of cash flows
For the record, Add Hope maintains strategic reserves to ensure its sustainability. During the Covid-19 pandemic, for example, its reserves enabled it to keep feeding hungry children when the trust had no income.
Daily Maverick: Could you outline the oversight towards nutritious meals, the overall approach to ensuring nutrition, and what the nutritious meals are? (as you did below)
KFC South Africa: Most Add Hope partners receive advice from a nutritionist to create budget-friendly menus. Menu planning typically follows a two-week rotation to prevent monotony. Organisations submit menus with their annual reports and the KFC Social Responsibility Trust ensures they offer a balanced diet with appropriate portions of carbohydrates, proteins, vitamins, minerals and hydration. The Trust also checks that the submitted menus are followed, and that portion sizes are suitable for the age and activity level of children. Add Hope-funded meals must cover at least 35% of a child’s recommended daily allowance. Add Hope also assesses efforts to accommodate special dietary needs or restrictions to ensure no child skips meals. And it makes sure feeding centres are aware of children’s food allergies.”
Daily Maverick: A written warning was recently circulated on social media showing a KFC South Africa employee receiving a warning for failing to “meet the Add Hope target”.
KFC South Africa: KFC set the record straight in the media on June 13 and LinkedIn posts on the KFC South Africa page addressed the issue https://www.linkedin.com/company/kfc-south-africa/ KFC South Africa investigated and made clear on social media that it “firmly opposes the use of the Add Hope programme as a performance measure”. The whistleblower line (0800 004 814) is managed independently by Deloitte and we encourage any KFC employees to call and provide the information in their possession so it can be investigated.
Daily Maverick: Another KFC employee, from KwaMashu in KwaZulu-Natal, a 28-year-old woman, told Daily Maverick: “There is always pressure because customers don’t believe the donations get to the underprivileged. It’s only 10% who believe. Customers argue with you… and ask a lot of questions. The management sets daily targets to meet for the R2s, and it is hard to meet those targets.
KFC South Africa: KFC encourages these two individuals to call the whistleblower line (0800 004 814) managed independently by Deloitte and provide the information in their possession so it can be investigated. To KFC’s knowledge, these former employees have not called the whistleblower line.
Daily Maverick: The 2024 Add Hope impact report speaks of “balanced nutritious meals daily with menus developed by dieticians to ensure optimal development of the children”, with no mention of the meal’s actual composition.
KFC South Africa: Most Add Hope partners receive advice from a nutritionist to create budget-friendly menus. Menu planning typically follows a two-week rotation to prevent monotony. Organisations submit menus with their annual reports and the KFC Social Responsibility Trust ensures they offer a balanced diet with appropriate portions of carbohydrates, proteins, vitamins, minerals and hydration. The trust also checks that the submitted menus are followed, and that portion sizes are suitable for the age and activity level of children. Add Hope-funded meals must cover at least 35% of a child’s recommended daily allowance. Add Hope also assesses efforts to accommodate special dietary needs or restrictions to ensure no child skips meals. And it makes sure feeding centres are aware of children’s food allergies. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
