KFC franchise

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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.

KFC business details

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 in the US 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:

  • US stores: Approximately 4300
  • Required Investor net worth: $1,500,000
  • Required investor liquid cash: $750,000
  • Min. investment: $1,800,000
  • Max. investment: $3,700,000
  • Standard franchise term: 20 years

Can I start a KFC franchise?

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.

How much does a KFC franchise cost?

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:

  • Royalty fee: 4% to 5% gross sales per month with a monthly minimum of $1,440
  • National advertising co-op: 4.5% gross revenue
  • Digital fee: 3.5% gross revenues from all digital (app) sales
  • Renewal fee: $9,600
  • Transfer fee: $4,800 first outlet, $2,400 subsequent outlets
  • Audit: Entire cost of audit
  • Additional/refresher training: $500 per person per week
  • Late royalty payments charge: 1.5% per month on past due sum
  • Outlet compliance checks: $276 to $346 per evaluation
  • Technology fees: $240 per month
  • One system fund fee: $180 per month per outlet

Estimated key costs to open a Jiffy Lube franchise:

Key Costs GuideLowHigh
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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Are KFC franchises profitable?

Yes. Average annual revenues for KFC restaurants (US 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.

What is the failure rate for a KFC franchise?

Very low. The failure rate for US KFC franchised restaurants is less than 1% in the first year.

Why should you start a KFC franchise?

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.

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What are the franchise territory policies for KFC?

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.

What franchise resources does KFC offer?

KFC support for franchisees includes:

  • Training: Franchisees must attend and complete the initial training program offered by KFC on the operation of an outlet. At the franchisor’s direction, other employees of franchisees must also attend and complete the training program. Training includes computer-based training through the franchisor’s Learning Management System program, online learning, written material, on-the-job training at other outlets and classroom instruction. KFC may also require franchisees and their employees to attend and complete additional and ongoing refresher training courses, programs and seminars at such times and locations that the company deems necessary.
  • Marketing support: KFC provides promotional and other marketing support for their franchisees.
  • Third-party financing: KFC provides limited financial support for investors seeking franchise funding. Alternatively you may be able to obtain more economical and flexible funding solutions from the many independent funders who provide business loans to franchise operators.

What is the process for starting a KFC franchise?

It begins with an application. Start the process here.

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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.

Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across the US. Just tell us what you need and leave the rest to us.

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Testimonials

Written by

Chris Godfrey

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 Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.

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Article sources
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Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

Franchise funding: https://swoopfunding.com/us/blog/funding-your-franchise-a-guide-for-franchisees/

Global revenues: https://www.statista.com/statistics/1017783/systemwide-sales-of-yum-brands-by-brand/

Profitability: https://sharpsheets.io/blog/kfc-franchise-costs-profits/

KFC franchise application: https://www.franchisehelp.com/franchises/kfc-kentucky-fried-chicken/

KFC: https://www.franchisehelp.com/franchises/kfc-kentucky-fried-chicken/

Failure rate: https://drfranchises.com/how-much-does-a-kfc-franchise-owner-make/

Set-up costs: https://www.franchisedirect.com/foodfranchises/kfc-franchise-07095/ufoc/

Global chain: https://www.eatthis.com/news-most-powerful-fried-chicken-chains/

Col. Sanders: https://www.kfc.co.uk/colonels-story

Third largest in US: https://hypebeast.com/2023/10/popeyes-surpasses-kfc-second-largest-chicken-chain-us-news

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