A friend and I got into an argument and made a subsequent bet last month. I claimed that KFC had more than 1500 stores in China, while he thought less than 500. We settled on 1000, and he later tried to claim that both of us lost because the true number so far away from 1500 to render both of guesses irrelevant. (Incidentally, I refused to accept his reasoning, and ended up collecting my winnings.)

Anyway, I'd like to share some of my observations (some based on research and some based on instinct/opinion) about the state of American fast food chains in China:

-McD's chose a slow and methodical approach to localization (in order to maintain a product consistent with its locations in other countries), which entailed a high cost structure during its first ~7 years in country
-But, once they had all their ducks in order, they owned their supply chains Wal Mart style, and saw sharp rises in profitability
-Incidentally, in spite of my current attempt to avoid that sort of cuisine, whenever I find myself in a random city, in which I detest the local cuisine, I'm delighted by the shear sight of the arches, which I typically can -- in the absence of physical obstructions -- spot from 2 miles away
-What's more, before heading into a random McD's, I can pretty much assure myself that my Big Mac will be just as good as the BJ/SH Big Macs, which are generally superior to their counterparts in the US (maybe the gap will close over time, as a job at McD's is no longer considered prestigious in the big cities)
-Pretty much from the outside, KFC determined that Chinese preferred locally available ingredients to pretty much anything they could import.... even I would tend to agree that your typical Chinese chicken is more delicious than its American counterpart, not to mention fast food grade chickens
-They never even bothered with the biscuits or mashed potatoes (they do sell the latter, but they taste like chalk and the locals regard them as "baby food")
-And, half of the menu consists of items tailored for the local market (you generally don't see identifiable chicken parts on the big board)
-But, hey; the Chinese seem to love KFC, and their costs are low, so they deserve some props
-Their Taco Bell experiment borrowed pages from the same play book (e.g. Chinese think refried beans -- like mashed potatoes -- are inherently gross, so why bother?). BTW, I remember reading reports about their market research efforts prior to launch and could already sense they were setting themselves up for an early exit
-I visited the Taco Belle Grande (their flagship) a few times and didn't witness many happy customers; the margaritas, in particular, were absolutely toxic
-Regarding BK, of course they should not be regarded as competition for McD/KFC; they have around ~30 stores, total
-That having been said, if we give them a chance to work out their bugs, it's possible that they will be able to get their act in gear as well

Sometimes, I think about fast food chains that it would be nice to see in China. Unfortunately, many of the best contenders are either tightly controlled or have sold their China rights away to people/companies that are simply sitting on them. As such, resurrecting chains from the dead or rescuing those that are about to go bust (e.g. Mister Doughnut, Kenny Rodger's Roasters) sort of makes sense.