I was a manager for KFC for a few years. They fly all managers down for training in Kentucky and we all hear the history of KFC.
Long story short: He developed the recipe on his own while caring and cooking for siblings when his mother joined the workforce after the death of his father during the depression.
Fast forward to 1930 when he was working out of a Shell gas station, serving food to travelers who started coming more for the chicken than the Gas.
From there, due to rations imposed by World War II, he moved around as a cook for other establishments and cafeterias.
finally, around 1950 (give or take a year or 2), a friend of his in Utah by the name of Pete Harman opened a restaurant and as a 'congratulations', Sanders visited him and offered to make him dinner in his own establishment. He made him chicken using his secret recipe.
Harman though it was so good, he went into a deal with Sanders to sell the chicken, keep the recipe secret, and share the profits (becoming Sanders' first franchise, which is still standing today).
Fun fact: In that era, there were many restaurants that had signs like "fried chicken", "hamburgers", etc. To stand apart, and because Sanders was from KY, Harman put "Kentucky Fried Chicken" on the sign to his restaurant, which is where the name comes from.
So to answer your question, no. He was not rejected that many times (to the best of my knowledge) because he wasn't actively trying to work in restaurants. He kind of fell into the food business by chance.