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Scurrying Rats Take Over NYC KFC-Taco Bell Restaurant

First they served up lettuce tainted with E.coli. Now they're plagued by fat and happy New York City-sized rats.

Yum Brands Inc. (YUM), the company that owns KFC, Taco Bell and Pizza Hut, made unwanted news again Friday as local television stations ran wall-to-wall coverage of apparently well-fed rats running wild, and appearing at home, in a New York City KFC/Taco Bell joint.

The latest food safety nightmare for the Taco Bell brand pushed Yum's stock down 1 percent and follows December's woes when more than 100 people fell seriously ill after an E.coli outbreak linked to Taco Bell lettuce.

That incident led to a sharp sales drop at Taco Bell, and performance has not yet fully recovered, Yum executives said last week.

When asked whether the latest news could raise questions about Yum's restaurant standards, Morningstar analyst John Owens said "it could certainly for consumers."

"People that see that footage may be reluctant to go to a Taco Bell but consumers also tend to have pretty short memories when it comes to these types of stories," Owens said.

Taco Bell spokesman Rob Poetsch said the restaurant is owned by a franchisee who also owns other Yum outlets. He did not know how many other restaurants were owned by the franchisee, whose name he did not disclose.

"We are working with him right now on corrective measures," Poetsch said.

RESTAURANT 'DIRTY'

The latest reports, aired on New York's WNBC and WCBS television stations, showed at least a dozen large rats scurrying around the West Village eatery, which was open Thursday night but was closed Friday.

While the rats were news to most, neighbors were not surprised. The restaurant is "dirty, filthy and is never taken care of," said Joel Cohen, a resident of the building next to the restaurant.

He said the stairway in the back of the restaurant is always dirty and overrun with rats.

Indeed, the outlet has had problems in the past.

According to the New York City Health Department Web site, the KFC/Taco Bell restaurant has been cited for rat or mice problems no fewer than four times in the past three years.

Last year, the restaurant was cited for 14 violations, including inadequate personal cleanliness; evidence of roaches or live roaches present in the facility's food; and evidence of mice or live mice present in the facility's food and/or non-food areas.

"This is completely unacceptable and is an absolute violation of our high standards," Louisville, Kentucky-based Yum said in a statement. "This store will remain closed until this issue is completely resolved."

New York Mayor Michael Bloomberg's office said the restaurant would be shuttered until the problem was fixed.

Earlier this week, the president of KFC, also known as Kentucky Fried Chicken, asked Pope Benedict XVI for a papal blessing for its new Fish Snacker sandwich.