It may be "finger lickin' good" but Kentucky Fried Chicken also had its share of sticky management issues.

Profits fell to $160,174 compared with $290,469 in the year ended January 31 2002 at Bermuda's only fast food franchise.

Presumed by many to be the Island's most profitable restaurant, KFC is no bowl of cherries according to Donald Lines, chairman of the board of KFC. It's not a company that you associate with the former president of the Bank of Bermuda.

But in February 1997 KFC was rescued from going out of business by a rights issue underwritten by Lines Overseas Management.

Donald Lines became the largest single shareholder through his company Bermuda Management Holdings.

According to Mr. Lines, the company's profits suffered last year due to the effects of 9/11.

There were reduced numbers of tourists and locals tightened their belts leading to lower sales during the first half of the year.

For the first half of the year, management took their eye off the ball; sales increased after the arrival of a new general manager, Frank Suess. Sales for the second half of the year increased by $117,430 compared to the same period in the previous year, thanks largely to the "first class" performance of the new manager, says Mr. Lines.

As for future strategy, "the main way to get better profit margins is to improve management of the facility," says Mr. Lines. There are no current plans to open a new franchise, although it is something they have looked at. After the IPO in 1997, one of the first things they did was to close the second franchise on Burnaby Hill.

"If we ever did open another branch it would be outside Hamilton with easier parking... it would be nice if you could drive through."

This year, however, they will concentrate on upgrading the facilities on Queen Street and there will be a $50,000 investment in the seating facilities.

They will also seek to tackle staff turnover and labour costs and recently appointed a new operations manager, Iris Kehler, who has experience of KFC operations in Canada and Jamaica and was heavily involved with staff training in these countries. "The franchise is worth something and KFC has standards which we adhere to, but you still have to have people and you still have to train them," says Mr. Lines.

Asked whether KFC really is one of the more profitable restaurants on the Island he says that they haven't done the research recently, but in 1996 of the ?2.2 million of chicken imported into Bermuda, ?1 million were sold to the food services industry and KFC accounted for 40 percent of that figure. They have their competitors such as Mr. Chicken, but KFC are still a big part of the market share.