The meme in Japan is called Donald (ドナルド) or Donald McDonald (ドナルド・マクドナルド). It started in Japan about a few months before Super Smash Bros. Brawl was announced. When a MAD video related to the meme was uploaded on YouTube, some English-speaking YouTube users wasn't repelled by the Japanese text (because they thought language means nothing), while they loved how "insane" the video looks.
Countries outside of Japan (especially the U.S.) were too lazy to look them up and just wanted to say "WTF?" They are also like people that just wanted to walk up to Ronald McDonald on purpose and say "I'm so scared of you!" Most people in North America are afraid of clowns, because of a horror movie or two that featured them with razor-sharp teeth and stuff.
Here are more Donald artworks by Masao:
Sometimes Colonel Sanders is seen next to Donald, because McDonald's and KFC are both American fast food chains in Japan. It is similar to the "McDonald's VS. Burger King" arguments in North America, but McDonald's and Burger King are often compared, because they both mainly serve burgers. Some fans like McDonald's more than Burger King, because it's like the original, while some fans like Burger King more than McDonald's, because of its superior char-broiled Whoppers with so many ways to order them. The arguments remind me of "Mario VS. Sonic", "Coca-Cola VS. Pepsi Cola", "Street Fighter VS. Mortal Kombat" and a few others. There are several stuff on the Internet about Ronald McDonald and Colonel Sanders looking at each other as major rivals. There was also a MUGEN character based on the Colonel Sanders part of the Donald meme, and one of his moves was taken from Oswald from the KOF series, while one of his winning quotes is one of Vega's (Japan)/M. Bison's (Worldwide) winning quotes.
Here are two KFC related artworks by Masao: