RJR continued to run KFC as an autonomous business for several years. In 1985 it acquired Nabisco and in 1986, in preparation for the subsequent move to take RJR Nabisco private, it sold KFC to PepsiCo Inc. for $840 million, over the objections of former Heublein chairman, Stuart Watson. Also this year the Colonel Sanders Technical Center in Louisville, Kentucky was established.

             The acquisition by PepsiCo was a significant turning point in the company"s history. In previous acquisitions by Heublein and RJR, KFC had been operated as a separate entity, although in different ways. Heublein tried to use its own managers to operate KFC, while RJR adopted a completely hands off approach. PepsiCo was looking to the acquisition of KFC to create some synergy within its other operations. Recently restructured into three major divisions, soft drink, snack foods and restaurants, PepsiCo could cross-pollinate between divisions, for instance by selling its soft drinks in restaurants. PepsiCo"s culture was also much different than KFC. PepsiCo placed a strong emphasis on employee performance, while KFC"s culture was more laid-back in the southern tradition.

             In 1991 a change was made that was to have unintended consequences. Kentucky Fried Chicken decided to change their name to KFC for several reasons, according to the web site Snopes.com, .

             A move to de-emphasize "chicken" because KFC planned to offer a varied menu that included other types of food. (The Boston Chicken corporation took the same approach for the same reason, changing their name of their retail food outlets to Boston Market.) .

             A desire to eliminate the word "fried," which has negative connotations to the increasingly health-conscious consumer market. .

             A recent trend towards the abbreviation of long commercial titles, as demonstrated by other companies' employing shortened forms of their names, such as The International House of Pancakes (IHOP) and Howard Johnson's (HoJo).