Yum Brands, which operates KFC, is facing a class-action lawsuit over its use of trans fat to fry food.
Partially hydrogenated oil, or trans fat, has been linked to heart disease.
The Centre for Science in the Public Interest, a non-profit food and nutrition lobby group, alleged that KFC "does not properly warn, disclose, or even tell its customers that they are eating food items prepared with the worst oil available and imaginable".
The consumer group wants the court to either stop KFC from using oils containing trans fat or to require signs to warn customers.
A KFC spokeswoman called the lawsuit "frivolous" and "completely without merit" and said the company would "vigorously defend" its position.
Last week, Wendy's International said it would begin cooking chips and chicken in trans fat-free oils.
Last year McDonald's paid out $8.5m (£4.6m) after a suit that accused the company of reneging on a promise to reduce trans-fat levels.
