This post is part of our Ads Gone Bad series. Share your thoughts and memories of this ad in the comments, and be sure to check out our other posts on marketing gone wrong.

Restaurant giant Yum Brands (NYSE: YUM) owns and operates several popular fast food chains like Pizza Hut, KFC, A&W, and of course Taco Bell. The Taco Bell chain features lower quality, packaged ingredients, frozen meats, and poultry, and all at low prices. Fair enough, it's a fast food joint and the food overall is okay-to-good -- depending on one's mood!

The Taco Bell dog featured in the advertising campaign that ended in 2000 was a Chihuahua, an almost rat-like creature. Cute? Yes. Annoying? Yes. I know because my family has a Chihuahua we call Gracie! The Hispanic community felt that the Chihuahua represented an ethnic stereotype. The dog was voiced-over with a Hispanic accent and the implication was very clear. Many Hispanics were especially annoyed because they do not consider Taco Bell's food authentic "home cooking."

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Taco Hell below in the comments.

Homer Simpson, when naming his first child, eliminated many monikers that he feared would invite rhyming nicknames (Screwy Louie, etc.) before choosing Bart (D'oh!). Combine this human propensity, the heat of Mexican food, and a soupçon of suspicion that low prices equal lower-quality ingredients, and the nickname for Taco Bell, Taco Hell, seems inevitable.

The YUM! Brands (NYSE: YUM) chain was born in the same town and at the same time as Mickey D's -- San Bernardino, California. There Glen Bell began selling 19-cent tacos, made possible by his innovation, using pre-fried taco shells. His restaurants, then know as Taco Tia, spread throughout southern California. In Redlands, the football L.A. Rams players who trained nearby began flocking to Bell's shop, and two of them became his first franchisees. In 1962, Bell sold out his share of the existing restaurants, now called El Tacos, and started Taco Bell. He took the company public in 1966 and sold his holdings to PepsiCo (NYSE: PEP) in 1975.

Shortly thereafter, the chain went international. It continued to grow thanks in part to savvy marketing, including one promotion offering a free taco to everyone in the U.S. if the Russian Mir space station, on its fall from orbit, were to hit a floating taco target in the Pacific. (It didn't.)

Referring to his long-recommended position in YUM! Brands (NYSE: YUM), Louis Basenese exclaims, "I've spent 1,308 days tracking its price movements and written 11,239 words expounding its virtues."

Indeed, the associate Investment Director for The Oxford Club states, "If I could only recommend one stock to own for the next decade, hands down YUM! Brands would be the one."

"YUM! Brands, operator of KFC, Pizza Hut and Taco Bell, is quietly transforming itself into an international juggernaut. Today, roughly half of its operations and profits come from outside our borders. Tomorrow (okay, not that quickly, but soon), more than two thirds of its business will be based outside the United States.

"And the transition and timing couldn't be more perfect. More than half the word's investable market capitalization is now outside the United States. And that percentage keeps growing.

Yum! Brands (NYSE: YUM) reported Q1 numbers Tuesday after the bell, and the company came through with double-digit growth on the bottom line. Net sales increased 8%, and earnings per share, adjusted for special items, increased 19% to $0.42.

There's a lot of cool stuff in this report that shareholders will view in a positive light. The international story for Yum! is a good one, with operating profit for this part of the company increasing 18%. China continues to be a strong territory for the KFC, Taco Bell, and Pizza Hut brands -- as many have pointed out, Yum! is a great way to gain exposure to this market. And how about this -- management saw fit to buy back shares of the company to the tune of almost a billion bucks! That says something to shareholders, as does the increased guidance. Granted, Yum! upped the per-share expectation by only a couple of pennies to $1.87 (excluding items), but that's still the right direction, isn't it? Also, according to Briefing.com, the company beat Wall Street's expectations by two cents.

Yum!, which competes with McDonald's (NYSE: MCD), Burger King (NYSE: BKC), Wendy's (NYSE: WEN), and all manner of neighborhood eateries, needs to continue the good fight on the home front. It reversed a negative same-store sales trend this past quarter, but management must not rest on this nice stat -- Yum! must explore better marketing campaigns and branding tactics to keep the comps headed higher. Yum!'s stock is not far from a 52-week high, but I'm currently bullish on its prospects.

Disclosure: I own none of the companies mentioned here; positions can change at any time.

As Barry pointed out last week, Taco Bell -- my favorite arm of the Yum! Brands (NYSE: YUM) empire -- introduced a "Steal a Base, Steal a Taco" gimmick wherein free crunchy beef tacos (one per customer) would be handed out if a base was stolen in the 2007 World Series. Thanks to a speedy move from Boston Red Sox rookie center fielder Jacoby Ellsbury, free tacos are on the table.

There are, of course, some catches. The offer must be redeemed between 2:00 p.m. and 5:00 p.m. local time tomorrow, October 30. And the deal is valid at participating locations only.

The site advertising the Free-Tacos deal, however, could use some updating. It closes with "Watch the 2007 MLB World Series Live on FOX." As fans of the national pastime already know, the Red Sox again nabbed the World Series trophy in a four-game sweep of their opponents. (They committed the same offense against the St. Louis Cardinals in 2004). Colorado Rockies fans should be entitled to two tacos as a consolation prize, but the bitter taste of defeat might have a negative effect.

Meanwhile, at YUM, regular tacos currently run somewhere around 89 cents to 99 cents a pop, depending on the market. That's a lot of free ground beef, cheese, and red sauce, even for a 3-hour window. I'm assuming YUM officials are counting on most free-taco bandits also ordering other menu items, or a drink.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

In yet another trite but undeniably efficient marketing scheme, Yum! Brands (NYSE: YUM) restaurant Taco Bell is offering one free Beef Crunchy Taco to every American if a base is stolen in the 2007 World Series.

Just one pilfered sack in the entire best-of-seven series, and a single taco -- likely worth less than your time and effort to make the trip -- can be yours for the taking.

Oh -- you have just three hours to redeem it. Between 2 p.m. and 5 p.m. on a Tuesday. Tuesday to be determined (October 30 if the first base is stolen in Game 1 or 2, November 6 if the first base is stolen in Game 3 or later).

Participating locations only.

For their sake, I hope America's college freshmen can get out of class and take advantage, if indeed a base is stolen in this year's series. Even as much of a laugher as this promotion is, it's totally plausible that no bases will be stolen.

Saturday, I was honored to be a bridesmaid in one of my best friend's weddings. The day started at 8:00 a.m. with a hair appointment - following a late rehearsal-dinner night on Friday - and didn't conclude until exactly 2:02 a.m. Why do I remember the end time so well? Because if I'd only concluded all of the dancing, the drinking, and the well-wishing 3 minutes earlier, I would have made it to the Taco Bell drive-through in time for a very late-night snack, or what the Yum! Brands, Inc. (NYSE: YUM) unit calls the "fourth meal." I had to settle for a competitor that keeps its drive-through open 24 hours but doesn't offer 7-layer burritos.

Turns out I'm not the only one with a hankering for Taco Bell food. Its parent company, which also operates the KFC, Pizza Hut, and Long John Silver's brands, reported after the close that its third-quarter profit jumped 17% to $270 million, or 50 cents per share. This figure was a nickel above analysts' expectations.

Revenue rose 13% to $2.56 billion on a year-over-year basis, also exceeding the Street's consensus view (of $2.44 billion). Looking forward, YUM now expects to book full-year earnings results of $1.65 per share, a penny above analysts' estimates.

YUM! Brands (NYSE: YUM) implied volatility suggests flat earnings per share (EPS) risk:

YUM will report EPS after the close on October 8th. CIBC says "YUM's solid global portfolio leaves it on-track to meet annual guidance. We also look for a div and potential buyback increase in 2H07." YUM July option implied volatility of 34 is above its 26-week average of 27 and below a level prior to its previous EPS release in July according to Track Data, suggesting flat near term EPS risk.

Taser (NASDAQ: TASR) 81cents to $17.39 on more unconfirmed rumors of contracts wins:

Recent unconfirmed chatter is circulating about a French government win. TASR October option implied volatility of 64 is above its 26-week average of 55 according to Track Data, suggesting larger risk.

Daily options update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

For a sport that just a few years ago was the darling of the blue-chippers, NASCAR has suddenly found love as hard to come by as a meth-addled octogenarian. After Anheuser-Busch (NYSE: BUD) dropped its 25-year long title sponsorship of the race promoter's second-tier series, Subway seemed a lock to take it on.

Now comes news that the restaurant's ardor for the series has cooled, and NASCAR has been forced to revisit formerly spurned suitors such as KFC (NYSE: YUM), Allstate (NYSE: ALL) and Dunkin' Donuts (D'OH!).

Along with the decline in interest has come a drop in price. The value of the sponsorship, once thought to run $30 million a year, has been halved. NASCAR is not the only loser in that drop; the original price included a mandatory ESPN ad buy of around $10 million, a requirement that has been relaxed.

According to Michael Smith in the Sporting News, Subway balked at the lack of exclusivity, a constant source of tension in the race industry where teams, tracks, OEMs and suppliers are also hustling sponsorships for every nut, bolt and beer cozy in the paddock.

NASCAR fans skew 60-40% male, slightly above the U.S. average in the 35-44 year of age category. They are overrepresented in the lower income categories, which would dampen the interest of luxury product companies. One interesting statistic is its popularity among America's fastest growing minority -- Hispanic fans have grown from 3.6% to 8.6% in only a few years. So how about the Taco Bell series? Or The Chipotle (NYSE: CMG) 500?

Zale Corporation (NYSE: ZLC) September implied volatility Elevated at 38. ZLC, an operator of 2,300 retail jewelry stores, closed Monday at $22.02. Goldman Sachs says, "We are downgrading ZLC to Sell from Neutral as growing macro headwinds, management upheaval, and poor strategic positioning will likely further pressure earnings." Signet Group (NYSE: SIG), a specialty jewelry retailer, terminated merger talks with ZLC in June 2006. ZLC overall option implied volatility of 38 is above its 26-week average of 30 according to Track Data, indicating larger price risks.

YUM! Brands (NYSE: YUM) implied volatility Elevated into Analyst meeting. YUM closed Monday at $32.72. YUM will host investor meetings in Beijing on September 6-7. Smith Barney has a Buy rating and $38 price target on YUM. SBSH says "YUM's China business is material to the overall business TODAY, representing about 20% of company-wide revenue and 23% of profits." YUM overall option implied volatility of 31 is above its 26-week average of 24 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Yum Brands Inc. (NYSE: YUM) reported a better than expected quarter with the international division leading the way. U.S. sales were basically flat, but the international division drove revenues up 12% year-over-year, and earnings up 13%. The Street was expecting an 11% increase.

Yum Brands suffered a serious set back in the New York City market in late 2006 when a Taco Bell restaurant had an E.coli outbreak and over 70 patrons became ill. The Taco Bell/KFC brand suffered another setback when a television crew in New York City filmed rats running in and out of the restaurant. Yum Brands has certainly taken the steps to prevent either situation from ever happening again, but the public image perception will take more time to change.

Due to the two unfortunate situations, same-store sales for the quarter were a negative 3%, mostly attributed to Taco Bell's negative 7% sales growth. KFC and Pizza Hut posted positive same-store sales, not enough to offset Taco Bell's results though.

Yum has found its sweet spot in the international division. The company is on track to open up 800 new units overseas this year, 375 of those in China. The Chinese market has been quite receptive to the Yum brands of Taco Bell, Pizza Hut and KFC. The margins are as strong in the international markets and the room for aggressive growth is certainly prevalent.

Yum is executing on its strategy and should finish the year with earnings of $1.63 per share. For 2008 the company is endorsing $1.81-1.84. The upside to the numbers could come from the various concepts building strong same-store sales in the United States. The jury, however, is still out if the company's image has been re-built to the level it enjoyed before the nasty New York City incidents.

Georges Yared is the Chief Investment Strategist of Yared Investment Research.

Yum! Analysts and investors alike eagerly gobbled up the first quarter earnings surprise for Yum! Brands (NYSE: YUM), sending the stock up 6%, to $66.91 as of late afternoon, an increase of $3.79. The shares were briefly over $69, an all-time high for the company. The 70 cents-per-share profit was a 14% increase from the year-ago quarter and six cents ahead of analyst consensus.

The favorable results are even more of a surprise given that Yum! has taken several hits with its brands this year, from a rat infestation at a combined Taco Bell/KFC restaurant in New York to a lawsuit over the E-coli outbreak of Q4 2006, and has yet to discover any benefit from the removal of trans fat at its KFC restaurants.

Despite all the world's concentration on the obesity epidemic, the rise in popularity of organic foods, and the general frowning-upon marketing of fast food and other unhealthy choices to children; it seems like a great time to be the owner of some fast food stock.

[Photo kanepsphotography.]

After dealing late last year with an E. coli outbreak which was initially thought to trace back to raw green onions, Taco Bell -- a division of Yum! Brands (NYSE:YUM) -- is being summoned to court. The Southern California farm responsible for harvesting said controversial (but in fact perfectly fine) green onions has filed a libel lawsuit, alleging that the fast food company continued to attribute the outbreak to the farm's green onions, even though the produce was not contaminated.

An attorney for Boskovich Farms has said that "Taco Bell engaged in an irresponsible and intentional crusade to save its own brand at the expense of an innocent supplier." This move ultimately cost the Farms "millions of dollars in business."

A Taco Bell spokesperson said the fast food company was merely acting in the interest of safety for its customers. "We believed green onions may have been the source based on the presumptive positive testing, so we immediately removed them from our products . . . we later learned they were not the source of the E. coli outbreak." Later analysis indicated that lettuce was the likely source of the outbreak, but not before green onions were stripped from all items at the company's 5,800 worldwide locations. Lettuce still remains in about 70% of the Taco Bell menu items.

The breakout, which caused more than 70 people in the Northeast to fall sick, cost the chain an estimated $20 million in operating profit.

In early trading, YUM shares are virtually unchanged.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

As a city dweller, believe me, I know. There are few things more disgusting than rats. I've dealt with rats in my parking garage where, much to our horror, we found evidence of rats rummaging around our Ford Taurus. When there was construction on my street, I was afraid to use the sidewalk at night for about six months one year for fear of having a furry rodent scurry across my shoes. Most recently, a soup kitchen and food pantry near my home suffered a rat infestation and had to shut down to clear the beasts out.

Rats are a fact of life in the city. As horrifying as each of these incidents were, they were eventually brought under control. The truth is, rats, cockroaches and other vermin can be controlled. And in a well-managed business or building, they should never get out of control.

That's why the recent, much-publicized rat infestation in a Greenwich Village KFC/Taco Bell (the restaurant chain is a division of Yum! Brands, Inc. (NYSE:YUM)) was so shocking. There probably are a few rats scurrying around in the sub-basements of many buildings in the city. But these rats were able to make it upstairs, in broad daylight. And so many of them! Some reports put the tally at dozens scurrying around.

For business owners, there are lots of lessons in this sorry tale. Here are a few of them -- followed by some rat-related information that may prove useful if you ever have to fight a rat infestation yourself:

Ignore a problem and it's bound to get bigger. As Michael Fowlkes wrote on BloggingStocks, the company initially deemed this a "temporary escalation" of what was previously understood to be a more ordinary rat problem.

A remarkable sight this morning unfolded in New York City as a dozen or so rats were caught on tape running wild through a KFC/Taco Bell today.

It seems that after local news stations heard about the rat sightings they flocked to the store to catch the rodents having their way around the restaurant. The rats were taped running between counters and tables and climbing on children's high chairs. Yikes, definitely not a good scene.

While today's rat race is definitely a disturbing event, it really shouldn't come as much of a surprise to the restaurant owners. Back in December when the store had a health inspection they were giving a passing grade but the inspectors noted at that time that there was evidence of rat droppings in the store.

The store has been closed until the store is completely re-sanitized and given a clean bill of health. According to a statement from KFC/Taco Bell construction in the basement on Thursday "temporarily escalated the situation."

Hmm... temporarily escalated the situation?? What is that all about? It makes me wonder what the normal rat situation is like for the restaurant.

The chains are owned by parent company Yum Brands, Inc. (NYSE:YUM) which is trading down 0.7% to $60.64 down $0.42.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.