KFC chickens are "genetically modified and have six wings and eight legs".
The fast food giant say three companies in China have been posting these rumours on social media.
KFC are not happy about this and has filed lawsuits against all of them for their posts on the mobile phone app WeChat.
KFC is demanding 1.5 million Yuan (£159,000, $242,000) and an apology from each. The Shanghai Xuhui District People's Court has accepted the case.
With more than 4,600 restaurants in China, KFC is the country's biggest restaurant operator.
KFC's China CEO Qu Cuirong said in a statement that it was hard for companies to protect their brands against rumours because of the difficulties in collecting evidence.
"But the stepped-up efforts by the government in recent years to purify the online environment, as well as some judicial interpretations, have offered us confidence and weapons," she said.
The companies being sued are Shanxi Weilukuang Technology Company Ltd., Taiyuan Zero Point Technology Company and Yingchenanzhi Success and Culture Communication Ltd.
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