The attorney general's office had sued about a dozen major snack and fast-food companies, seeking compliance with Proposition 65, which was passed by voters in 1986 and requires businesses to provide "clear and reasonable" warnings before exposing people to potentially dangerous substances.
The suit, filed in 2005, argued that warnings were needed for cooked potato products because they contain higher levels of acrylamide than other foods. Acrylamide is a byproduct created through the reaction of chemicals in food to high heat.
Without admitting wrongdoing or violation of the law, KFC Corp. agreed to display warnings at its restaurants and to pay $341,000 in civil penalties and funding for Proposition 65 enforcement.
Matthew M. Preston, KFC general counsel, described the accord as a "win-win."
"We are doing our part in California," Preston said in a telephone interview. "We are going to put [warnings] on nutritional posters we already have in the stores ... and there will be a more detailed warning on brochures in a pocket on the poster."
The warning, in part, says: "Cooked potatoes that have been browned, such as French fries, baked potatoes and potato chips, contain acrylamide, a chemical known to the state of California to cause cancer.... It is created in fried and baked potatoes made by all restaurants, by other companies, and even when you bake or fry potatoes at home."
When asked whether the company would add similar warnings at restaurants around the country, Preston said that he was unaware of any other states requiring health warnings for acrylamide and that it naturally occurs in a wide variety of cooked foods.
Snack food and fast-food companies had contended that the suit, filed by former Atty. Gen. Bill Lockyer, would unnecessarily alarm the public and that it unfairly singled out their industry because many non-potato products also contain acrylamide, including coffee, toasted cereals and breads.
But the attorney general's office said a serving of French fries or potato chips has about 82 times more of the substance than is allowed under U.S. Environmental Protection Agency standards for drinking water.
Supervising Deputy Atty. Gen. Edward G. Weil said that he is in settlement talks with Burger King Corp. and Wendy's International Inc. and that the KFC warnings are "a good template" for fast-food restaurants.
"Restaurants already tend to have nutritional facts" available to the public, "and we are taking advantage of that system to give Proposition 65 warnings," he said. "We are not telling people not to eat fries, but we want them to have that information" about acrylamide. "This is an additional cancer risk that will matter to some people."
Michele Corash, a San Francisco attorney who represents Wendy's and Burger King, declined to discuss her negotiations with the attorney general's office.
Corash said manufacturers she represents -- H.J. Heinz, Lance Inc. and Kettle Foods -- are not yet in settlement talks.
And she noted that posting Proposition 65 warnings is much more complicated for nationwide snack manufacturers than for fast-food companies with individual outlets.
"Restaurants can have California-specific warnings because they have an address and a location," Corash said. "With a box of ... potato chips, no matter where it is produced, there is a lot less knowledge about where it ends up geographically and who is served.... So the option that made it possible for KFC to settle is not an option for manufacturers."
The KFC settlement is subject to approval by Los Angeles County Superior Court Judge Wendell Mortimer. A hearing is set for May 29.