They changed the name because the state of KY wanted to make them pay for the use of "Kentucky."
The name was changed back in 2006.
No, seriously, understand what the "Lost Legends" of snopes.com represents. Check out:
On the other hand, if you believe that Mr. Ed was really a zebra or that the California state flag was supposed to display a pear instead of a bear, then feel free to believe whatever you want to about KFC.