Huh interesting. I always thought he was a military retired Colonel and as such already pretty rich before he started the franchise. I had no idea it was also a Honorary title in America.
US military used to be largely made up of state militias (dating back to colonial days), run by the governor, with the federal government sometimes funding, equipping, and mobilizing those militias in times of war. Commissions in state militias were sometimes used by governors as a reward or gift to their political supporters. In particular, "colonel" was a rank often bestowed on wealthy benefactors without any expectation of actual military duty.
The militias were largely nationalized in the early 1900s, creating what's now called the National Guard. Governors still have limited power to deploy their state Guard but they're mostly under federal control. But some states retained the tradition of honorary colonels, and Kentucky is probably the most famous.
(There are a lot of other kind of goofy honorary state militia titles in the US -- Admiral of the Texas Navy, etc. Some of them don't require much more than paying a fee.)
Kentucky became famous for it because it did immediately stop being an militia title in every way. A charitable foundation was setup for using the title as a part of a charitable works program and several early Governors involved in that decided that it would be a useful idea to give the title to celebrities and other "ambassadors" to/from the commonwealth, making it as much a title to promote tourism as anything else.
I think that's the fun ouroboros nature of Colonel Sanders' title in that he was made a Colonel for the predecessor to KFC. (The Sanders Cafe at his Standard Oil Gas Station was one of the first "Welcome to Kentucky" stops for early car travelers coming into Kentucky via the roads through the Cumberland Pass [I-75 today].) The Colonel of KFC was a Colonel because of KFC, just about.
