Crowds have protested outside KFC repeatedly this month, breaking windows, setting fires and threatening staff.
"A total of 20 incidents occurred across Pakistan with one fatality reported. The man was a staff member at KFC," deputy interior minister Talal Chaudhry told a news conference on Saturday, describing KFC as "under attack".
The KFC employee was shot dead at a branch on the outskirts of Lahore, the capital of Punjab province, on Sunday.
A police official told AFP that it was unclear what the motive for the shooting was or whether it was linked to the recent protests.
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Chaudhry said that 145 people were arrested in Punjab province and 15 in the national capital Islamabad over the spate of attacks.
"These restaurants source everything locally and employ Pakistani staff, and their earnings remain within the country," he said.
KFC and its parent company Yum! Brands have not responded to requests for comment.
A KFC restaurant in the Pakistan-administered region of Kashmir was set on fire in March last year as protesters chanted "Free Palestine".