KOA Franchise Cost, Fees & Failure Rate 2024

You have stopped at the right place if you’re looking for campgrounds or RV parks for sale, or you currently own an independent park and want to learn more about what the KOA Franchise name can do for you.

KOA Franchise

About The KOA

KOA (Kampgrounds of America, Inc.) is the world’s most extensive privately owned campsite network.

Across the United States, the organization has a reputation for regularly providing clean and convenient camping accommodations.

KOA has rapidly grown into international markets since 1992. Oscar L. Tang and his family own the business.

Connecting people to the outdoors and each other is the aim of Kampgrounds of America, Inc. (KOA).

KOA’s family of campground brands, KOA Journey, KOA Holiday, and KOA Resort, are the industry leader in outdoor hospitality, with sites and facilities tailored for every camping experience.

Almost every one of KOA’s 500 campgrounds is owned and operated by a different company. KOA receives a franchise fee and a yearly royalty from each campground.

Companies can use KOA’s widely recognized emblem and profit from being part of a well-known and well-respected network.

KOA, the first franchised campsite, has had to adapt to the changing nature of the camping sector.

History Of KOA

In 1961, Dave Drum founded Kampgrounds of America.

In 1962, when the World’s Fair in Seattle brought travelers along those roads, he and other Billings, Montana, merchants put up camping facilities off highways 87 and 212.

Drum developed a network of campgrounds along America’s highways when he began franchising. 

Due to a copyright issue, he was forced to use a ‘k’ instead of a ‘c’ in ‘campgrounds.’

Hot showers, clean restrooms, laundry facilities, convenience stores, swimming pools, and playgrounds are all available at KOA campgrounds.

KOA has developed furnished cabins (Kamping Kabins and Kamping Kottages) to lodge visitors, while tent camping has waned in popularity.

Furthermore, KOA caters to RV travelers in a variety of ways. 

KOA Franchise model 

Cost Or FeesAmount
Initial Investment$26,750-$4,462,925  
Initial Franchise Fee$7,500-$30,000  
Royalty Fee8%  
Area RequirementN/A
Total Outlets500

KOA Franchise Revenue & Profit

The profit and revenue of a KOA franchise owner may vary from one location to another, among other things.

According to the FDD of KOA, the total sales and operating revenue of the company in 2022 was $179,673, 853 and for the franchised outlets, it was $4,124,252 in the year 2023.

So if we assume a profit margin of 15% as per the industry standard, then we can calculate that a KOA franchise owner makes an estimated $618,637 in annual net profit on average. 

This is how we reached this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%4124252.00
Franchise Royalty Fees5.31%(219100.89)
Cost of Goods Sold (COGS)26.56%(1095504.44)
Labor (Variable)13.81%(569662.31)
Total (Expenses)85.00%(3505614.20)
Net Profit15.00%618637.80

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.

Failure Rate Of KOA Franchise

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change

For the Franchised outlets:

  • In 2020, the failure rate was (0)/451×100≈0.00%
  • In 2021, the failure rate was (12)/451×100≈2.66%
  • In 2022, the failure rate was (16)/439×100≈3.64%

According to the above-mentioned data, the franchised outlets of KOA are declining as the outlets at the end of the year are less as compared to the outlets at the start of the year during the span of 3 years.

Overall, we can see that the KOA franchise shows a total failure rate between 0.00% and 3.64%.

Payback Period Of KOA Franchise

With a midpoint investment of $2,244,837 and an estimated 15% profit on the average revenue from 2023, the yearly profit would be $618,637.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $2,244,837 / $618,637= 3.6 years

Based on these figures, it will take approximately 3-5 years to pay back the initial investment for KOA. This time period could be longer or shorter depending on your sales, revenue, and profit figures.

Support & Training Of KOA Franchise

KOA provides ongoing training and support to its franchisee partners from the world’s foremost specialists in campground management:

  • KOA-U sets the groundwork for our owners’ success at their premium campground management training center.
  • KOA’s regional rallies and annual convention provide continual education on industry developments, marketing strategies, and campsite operations.
  • KOA’s field service representatives are skilled and experienced in providing on-site consultation to help businesses enhance their operations and profitability.

Urban Air Comparison

CompanyKOA Marriott
Founded In19921927
Initial Investment$26,750-$4,462,925  $5,000,000 – $7,000,000  
Franchise-Fee$7,500-$30,000 $50,000
Total Outlet5007,500
Annual Revenue$344 Million$13.86 Billion

Frequently Asked Questions 

Why is KOA so costly?

Because it is privately owned and operated, KOA is pricey. The owners must incur costs associated with franchising the KOA name. They provide excellent amenities such as swimming pools, showers, and clean restrooms, all of which require workers to keep them spotless.

Is owning a campground profitable?

Owning a campsite may be incredibly fulfilling in addition to being extremely profitable. Being your employer has the advantage of keeping you busy.

How many KOA locations are there in the United States?

There were 452 KOA facilities owned and operated by franchisees around the United States as of the Issuance of 2021. KOA also has 34 corporate properties that it owns and operates.

Is KOA a franchise?

Yes, KOA is a franchise organization. It offers three different types of campground franchise opportunities.

How much does a KOA franchise cost?

KOA requires a franchise fee of up to $7,500-$30,000 with a total investment of $26,750-$4,462,925.

Who owns KOA?

The current owners of KOA are Oscar Tang and Agnes-Hsu Tang.

Who founded KOA?

KOA was founded in 1962 by Toby O’Rourke.

Where is KOA Headquartered?

KOA is headquartered at 1205 N. Transtech Way.

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