Originally, yes it was an acronym, then they officially changed it to a word in 2006. https://en.wikipedia.org/wiki/AOL
The very first words at KFC.com are "Kentucky Fried Chicken"
Doing a text search on the home page says Kentucky shows up two more times.
http://www.snopes.com/lost/false.asp
(And yes, I got sucked into the "Kentucky trademark" story too.)
While Kentucky Fried Chicken did change its name, it wasn't for the reasons given in that account.