CHURCHS TO PECK AT KFC CREST : THE FAT IS IN THE FIRE FOR FRIED-CHICKEN WAR.

Byline: Deborah Adamson Daily News Staff Writer

A Southern-fried chicken chain is gearing up for expansion in Los Angeles, hoping to ruffle the feathers of the top bird, Kentucky Fried Chicken.

``We'd love to give KFC a run for the money,'' Hala Moddelmog, president of Churchs Chicken, said Friday. ``The issue is that we don't have their sheer number of restaurants in the area.''

That will change.

Under a franchising agreement signed this week, 100 new Churchs Chicken restaurants will open in Los Angeles, San Diego, San Francisco and Sacramento in the next five years at mall food courts, shopping centers and other sites.

The expansion will nearly triple the number of Churchs eateries in California. The parent company, AFC Enterprises of Atlanta, also owns the Popeyes fried chicken chain.

The new Churchs restaurants will be operated by Best American Hospitality Inc., a new franchisee started by the founders of Lone Star Steakhouse and Longhorn Steaks. In the deal, Best American also bought 47 Churchs Chicken restaurants that already exist in California, including one in Van Nuys, five elsewhere in Los Angeles and five in the San Gabriel Valley.

``It's an aggressive move,'' said Janet Lowder, president of Restaurant Management Services, a consulting firm in Rancho Palos Verdes. ``Churchs and Popeyes never had a big presence in Los Angeles and the Southwestern states.''

Best American also plans to revamp the look of the stores. Yellow, red and teal will replace the old orange-and-green color scheme. New signs, better lighting and new uniforms also will be ordered.

``It's time for retooling,'' Lowder said. ``It will enhance their presence.''

Churchs will continue to offer Southern-style fried chicken with mashed potatoes, okra, corn on the cob and honey-butter biscuits. Occasionally, new items will be introduced. Coming soon are turnip greens.

Analysts say the competition will be tough for Churchs. Of KFC's 5,000 stores nationwide, 600 are in California.

Nationwide, AFC has 2,000 Churchs and Popeyes stores.

AFC's annual sales are $1.5 billion, a third of KFC's.

``This will be a major challenge for (Churchs),'' said Gerry Hirschberg, an analyst at Standard & Poor's in New York. ``KFC is a formidable competitor.''

Churchs Chicken also will be competing against Boston Market and Kenny Rogers Roasters, East Coast chains that are expanding aggressively in California.

Those expanding chains ``are definitely a threat,'' said Allan Hickok, an analyst at Piper Jaffray in Minneapolis. ``They offer affordable, more healthful food.''

Jeannie Litterst, a spokeswoman for PepsiCo's KFC division, said the chain welcomes the competition.

``The more people think about chicken, they'll think about KFC,'' she said. ``We're just around the corner from them.''

But Moddelmog is undeterred: ``We've done better than KFC in many markets.''