KFC is one of the most recognizable fast-food restaurants in the world and has been providing customers with their classic fried chicken for over 70 years. Starting as a small diner by Colonel Sanders, KFC quickly gained popularity with its signature recipes throughout the United States.
Growing from a single location to more than 25,000 locations worldwide today, it is no surprise that many aspiring entrepreneurs and business owners are looking into the possibility of owning a KFC franchise. Every 6 hours, a KFC franchise is opened somewhere in the world, making it an excellent opportunity for those wanting to own their own business.
In this article, we will explore all aspects of becoming a KFC franchisee so you can make an informed decision about whether or not it’s right for you. Read on to learn everything you need to know about opening a KFC franchise.
About the KFC
KFC, also known as Kentucky Fried Chicken, is a global fast-food restaurant chain that specializes in fried chicken. It is currently the world’s second-largest restaurant chain, with over 25,000 locations across more than 145 countries. According to KFC, 99% of these locations are owned and operated by franchisees.
One of the things that KFC is most famous for is its delicious fried chicken. The recipe for KFC’s chicken has remained a closely guarded secret, but what is known is that the chicken is marinated in a blend of herbs and spices before being battered and fried. This creates a unique flavor that is both spicy and savory and is loved by people worldwide.
In addition to its fried chicken, KFC also offers a variety of sides, including mashed potatoes, coleslaw, and salads. They have also expanded their menu to include items such as chicken sandwiches, popcorn chicken, and chicken wings.
History Of KFC
KFC was founded in Utah in 1952. Harland created his one-of-a-kind formula using 11 herbs and a few flavors in July 1940.
After a long journey, Harland Sanders finally divulged his secret recipe to his friend Pete Harman.
With Pete’s aid, Pete owned one of the city’s most well-known restaurants, and Harland created his first KFC franchise.
After that, Sanders used to visit all of KFC’s locations worldwide, even after the company’s remarkable success. Various franchisees started approaching him.
KFC Chicken had many places, but none of them were signature locations. Subsequently, KFC also guarantees that Colonel’s recipe will never change. And Colonel Sander had a simple decision to make.
Finally, he realized that building and controlling an organization on one’s own is difficult. As a result, in 1964, he decided to sell his company for $ 2 million.
Now, the new KFC owner acknowledged that Sander’s face was possibly the most potent resource for the “KFC brand.”
KFC Franchise Model
| Initial Investment | $1,442,600–$2,771,550 |
| Franchise | YES |
| Franchise Fee | $45,000 |
| Royalty Fee | 5% |
| Liquidity | $750,000 |
| Estimated Outlets | 25,000+ |
How Much Does It Cost To Open A KFC Franchise?
The cost to open a KFC franchise is significant, and it is important to be aware of all expenses associated with the process.
The total estimated investment to open a KFC franchise ranges from $1,442,600-$2,771,550. In addition, prospective franchisees must have a net worth of at least $1.5 million and be able to demonstrate access to liquid assets of at least $750,000.
KFC requires each franchisee to pay an initial franchise fee of $45,000 when signing the agreement. This fee is in addition to any other costs associated with opening a KFC location, such as rent or equipment costs.
Franchisees are also responsible for ongoing fees paid on a monthly or annual basis, including royalty payments (5% of gross sales) and advertising fees (5% of gross sales).
KFC Franchise Owner Revenue & Profit
KFC has experienced steady growth in recent years, with the company generating $2.83 billion in revenue in 2022. That’s an impressive increase from their 2021 total of $2.79 billion, which was itself a significant jump from the year prior.
KFC franchisees typically make an average profit of $384,031 annually, and KFC has a strong 25% adjusted EBITDA margin, meaning that the money spent on operating expenses is lower than its income from operations. These strong figures are a testament to the brand’s enduring popularity and ability to operate franchises successfully in multiple countries around the world.
KFC Franchise Requirements
In addition to the monetary requirements, KFC also has a number of other criteria that potential franchisees must meet in order to be considered for ownership.
KFC prefers that prospective franchisees have prior experience in multi-unit operations, such as operating more than one restaurant location. This experience often gives an individual an understanding of how the restaurant industry works and the skills needed to manage multiple locations.
KFC also looks for candidates with a high level of motivation and dedication to the company. Individuals should be willing to take on managerial responsibilities and stay involved with the day-to-day operations of their location.
KFC Franchise Training And Support
Once a prospective KFC franchisee has been approved and all requirements have been met, they will be required to attend an initial one-week orientation at the company’s headquarters in Louisville, Kentucky. During this week, the new franchisee will undergo a series of training sessions designed to familiarize them with the KFC brand, menu offerings, and operational procedures.
Following orientation, prospective franchisees are required to complete two weeks of online training courses. These courses offer an interactive learning experience that covers important concepts such as financial management, marketing & sales strategies, store operations, and more.
After completing the virtual training program, KFC franchisees must attend a four-week hands-on training course at a certified KFC restaurant. During this time, franchisees will receive instruction on all aspects of running a successful restaurant, including customer service skills, cleaning and sanitation practices, inventory management techniques, and more.
KFC is also committed to ongoing support for its franchisees. The company provides access to resources related to marketing materials, nutrition information updates, employee recruitment assistance programs, and more. They also provide regional business consultants who assist with local challenges or opportunities by providing guidance or advice on specific areas of concern.
KFC Franchise Terms Of Agreement & Renewal
KFC franchises have an initial term of 20 years and can be renewed for an additional 20 years. All franchise terms are subject to a number of conditions, including the payment of royalties and advertising fees, compliance with KFC food safety regulations, and adherence to KFC brand standards.
Failing to meet these requirements can lead to the termination of the franchise agreement before its end date. However, those who successfully complete their initial contract period can look forward to an additional 20 years under the same agreement.
KFC Franchise Obligations And Restrictions
Franchisees must name a “Control Person,” who is the person having the authority to manage and effectively direct the business affairs of the franchise.
Franchisees must also adhere to KFC’s operational standards, which include menu offerings and pricing restrictions, as well as equipment, décor, and signage regulations. KFC also requires its franchisees to keep up with technology in order to provide customers with a modern experience.
KFC franchises are restricted from operating any other restaurant businesses or using their brand name for any purpose other than that of the franchised location. Franchisees are also prohibited from reselling any KFC products without permission from the company.
KFC Franchise Financial Assistance
KFC does not offer direct or indirect financing for its franchisees, nor does it guarantee any note, lease, or obligation. However, the chain’s parent company Yum! Brands do have a Minority Lending Assistance Program that provides qualified minorities with financial assistance in the form of small business loan funding from participating banks and lenders.
Under this program, 25% of your franchised business loan’s principal can be provided by Yum. The loan must be used for specific purposes, such as the purchase of equipment, the payment of franchise fees, and the general operation of a KFC franchise.
KFC Comparison
| Company | KFC | Wendy’s |
|---|---|---|
| Year Founded | 1952 | 1969 |
| Franchise Fee | $45,000 | $50,000 |
| Initial Investment | $1,442,600–$2,771,550 | $1,000,000–$3,000,000 |
| Number of Outlets | 25,000 | 7,000+ |
Conclusion
KFC is arguably one of the most recognizable restaurant chains in the world, and owning a KFC franchise provides aspiring entrepreneurs an opportunity to join this iconic brand. With comprehensive training courses and ongoing support, those serious about opening a KFC restaurant can quickly become part of the family.
Now that you know the terms, requirements, and restrictions of becoming a KFC franchise owner, you can decide whether this is the right venture for you.
FAQs
Does KFC Offer Franchising?
Yes, KFC offers franchising opportunities to entrepreneurs interested in owning and operating a restaurant under the iconic brand.
Who Founded KFC?
KFC was founded by Colonel Harland Sanders in 1952.
How Many KFC Locations Are There?
As of 2023, there are more than 25,000 KFC locations in over 145 countries and territories around the world.
Is Opening A KFC Franchise A Good Investment?
Opening a KFC franchise is certainly a good investment for those prepared to make the necessary financial commitment, have the right qualifications, and are willing to follow all of the company’s rules and regulations.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.