KFC is one of the world’s best known fast food brands. Via company owned and franchised restaurants they sell fried chicken and related food and drink products at more than 29,000 locations in 147 countries. Global revenues exceeded 33 billion dollars in 2023.
Colonel Harland Sanders opened the first franchised Kentucky Fried Chicken restaurant in Salt Lake City, Utah in 1952. More than 70 years later, the name-abbreviated KFC is now headquartered in Louisville, Kentucky and is the third largest fried chicken chain behind Chick-fil-A and Popeye’s. However, the brand still dominates the global scene. They are the second largest fast food chain in the world after McDonald’s.
KFC at a glance:
You can if you have at least $750,000 in liquid cash and a net worth of $1,500,000. You’ll also need to meet start-up costs that can reach almost four million dollars. KFC does not demand that franchisees have past experience in hospitality, but clearly, with this kind of investment, prior experience in the fast food industry or a similar high-volume consumer business would be helpful. The company expects owners to be on the restaurant floor and running operations daily. This is not a passive investment opportunity.
As you may expect when buying into a major global fast food network, you’ll need deep pockets to join the club. Expect to spend anywhere from $1,800,000 to $3,700,000 to start your new KFC restaurant, which ranks the set-up cost as very high.
The initial franchise fees total $45,000. There are no fee discounts or other franchise incentives for military veterans.
After opening, you are required to pay an array of ongoing fees and charges. They include:
| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $45,000 | $45,000 |
| Background check – per person | $575 | $2,500 |
| Real property (land costs) | $300,000 | $1,100,000 |
| Construction costs | $1,000,000 | $1,900,000 |
| Permits, licenses and security deposits | $50,000 | $325,000 |
| Training expenses | $5,000 | $8,000 |
| Equipment, signage, décor, POS etc. | $375,000 | $606,000 |
| Initial inventory | $10,000 | $10,000 |
| Grand opening costs | $5,000 | $5,000 |
| Insurance | $7,250 | $10,000 |
| Miscellaneous expenses | $5,000 | $10,000 |
| Additional costs – first three months | $50,000 | $75,000 |
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Yes. Average annual revenues for KFC restaurants (Canada based) are $1,603,000 per year. Although margins in the hospitality industry are notoriously tight – typically 7% to 10% – you can expect net profits of $95,000 to $160,000 per year. This ranks as good.
Very low. The failure rate for Canadian KFC franchised restaurants is less than 1% in the first year.
Major brand name. The support of a global business. Steady streams of loyal customers. Good profits. Miniscule failure rate. What’s not to like about this? If you can get past the hefty start-up costs and accept the fact that it will take anywhere from 10 to 20 years to get your initial investment back, starting your own KFC restaurant could be the franchise for you.
Franchisees do not receive an exclusive territory. However, as long as franchisees remain in compliance with their franchise agreement, they receive a ‘protected territory’ of the smaller of (i) a radius of 1.5 miles from the outlet, or (ii) an area around the outlet where 30,000 people reside, or, in the case of a metropolitan area containing more than 100,000 people, within which 30,000 people reside or work. Within the protected territory, KFC will not use, or permit other franchisees to use, any of the trademarks that franchisees have the right to use under their franchise agreement.
KFC support for franchisees includes:
It begins with an application. Start the process today.
Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new fried chicken business like too much hard work.
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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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