A Kenny Rogers Roasters chicken restaurant opens across the street from Jerry’s apartment building, complete with a gigantic red neon chicken atop the roof. The light from the Kenny Rogers Roasters sign beams right into Kramer’s apartment. The bright red chicken light takes its toll on Kramer’s sleeping schedule, so he proposes that he and Jerry swap apartments. Kramer hangs a banner from his window protesting the restaurant in an attempt to get rid of the neon sign. Jerry and Kramer switch apartments, and Kramer takes the opportunity to invite Newman over. Newman brings over a box of Kenny Rogers Roasters chicken, to which Kramer unwittingly lets himself get addicted. Jerry finds himself unable to sleep in Kramer’s apartment and gradually takes on Kramer’s mannerisms, while Kramer becomes more like Jerry. Jerry sees Newman buying enough chicken for two people at Kenny Rogers and discovers that Kramer is hooked on the stuff after the sales clerk tells Newman that he had forgotten to give him his broccoli that Jerry knew that he (Newman) hates. After Jerry unintentionally sabotages the restaurant with George’s drenched hat, the restaurant shuts down and the neon light finally goes off, but Kramer loses access to his beloved Kenny Rogers Roasters chicken.
While scoping out the new restaurant, Jerry runs into an old college buddy named Seth, whom he persuades to blow off a business meeting in order for them to go have lunch together. However, Jerry learns that the meeting Seth blew off was vital to Seth keeping his job. He then learns that Seth has lost his job and discovers that Seth is working as the assistant manager at Kenny Rogers Roasters. Later, Jerry shakes Elaine’s rain-soaked rat hat while at Kenny Rogers Roasters, covering the food with rat fur and prompting a shutdown of the restaurant.
Elaine, acting as the Peterman Catalog president, has fun charging numerous expensive purchases to the Peterman account, including a new sable Russian hat for George. Elaine gets called out by the Peterman accounting department for her impulsive charges to the company account. George, donning his new hat, brags about his prospective date with Heather, the saleswoman who sold the hat to him. He explains that if the prospect of a second date looks slim, he’ll simply pull a “leave-behind” as an excuse to come back. Elaine is able to justify all her recent purchases as business expenses, except for George’s hat, which cost a staggering $8,000. Heather is unimpressed by George, so he leaves his new hat behind in Heather’s apartment. Elaine needs the hat to justify her purchase, but when George tries to reclaim it, Heather insists that she doesn’t have it.
George and Elaine still can’t find the hat in Heather’s apartment, and as an act of revenge, George secretly steals Heather’s clock. Jerry directs Elaine to a source for a replacement hat to make up for the one George lost. However, the Peterman accountant isn’t fooled by the substitute hat, which is made of nutria fur. To save her job, Elaine sets off for the jungles of Burma to seek the approval of J. Peterman himself. George thinks that Heather is wise to his theft of her clock and is willing to make a swap for the hat. In the Burmese jungle, Elaine locates Peterman, but he can’t approve her purchases without seeing the hat either. George learns that Heather is actually interested in him and really does not have his hat. She breaks it off when she discovers her stolen clock in George’s possession.