KFC Franchise Startup Cost, Revenue and Profit Margin
KFC Corporation can be considered to be the world’s most popular chicken restaurant outfit. The company specializes in Original Recipe, Colonel Crispy Strips and Extra Crispy (All Trademarks) with home-made style sides, freshly made chicken sandwiches and Honey BBQ Wings.
The KFC Corporation has about 14,000 outlets at about 80 countries of the world and they serve a whopping 12 million customers every single day. They are a subsidiary of Yum! Brands
As an entrepreneur, what you might be only concerned is how much is a KFC Franchise? And to get information about their franchise if they do sell.
DOES KFC SELL FRANCHISE?
The KFC Corporation sells franchise and they began doing this in the year 1952. So if you are all set to tap into their unique recipes and have the passion to deliver great customer services to your potential customers at your KFC Franchise unit, then you will be doing yourself good buying into their franchise opportunity.
FRANCHISE INFORMATION ABOUT THE COMPANY
The company was established in the year 1952 by the popular Colonel Sanders, he died in the year 1980, and he first dispensed his fried chicken recipe back in the year 1930 in North Corbin, Kentucky.
He Original Recipe of fried chicken was developed in the year 1940 after which the restaurant was sold in the year 1950.
The KFC Company has been sold more than 3 times since its inception. It was sold to Hueblein in 1971. In the year 1982, R.J Reynolds bought it and in the year 1086, it was sold to PepsiCo.
PepsiCo then made the company a subsidiary of their Tricon Global Restaurant, which later changed to Yum! Brands.
THE KFC FRANCHISE OFFER
As a KFC Franchisee, the franchise agreement will give the permission to use their license and also some certain trademarks of the KFC brands, which will include trade names, logos, service marks, commercial symbols (which will include the KFC and the Kentucky Fried Chicken marks).
You will also be licensed to utilise the company’s business formats, procedures, methods, layouts, designs, standards of the KFC Brand.
HOW MUCH IS A KFC FRANCHISE?
You will need to understand that buying into a franchise will come with great costs. The cost of a KFC Franchise will be dependent on so many factors depending on the choice of the franchisee, in terms of location.
The startup cost of a KFC franchise will range between $1,200,000 to $2,500,000. You will be expected as a franchisee to have at least $1,500,000 in net worth and $750,000 as liquid assets.
WHAT IS KFC INITIAL FRANCHISE FEE
You will also be expected to make a KFC initial Franchise fee of $45,000 and also a 5% Royalty fee monthly on the gross sales of your franchise unit. For KFC South Africa, you will be asked to pay around R5,000 as application fee.
KFC TERMS OF AGREEMENT AND RENEWAL
The period of the initial franchise agreement will be 20 years, which can be renewed if the franchisee meets the requirement of renewal, but the franchisee will be expected to sign a new contract as differently stated from the initial agreement.
IS THERE ANY FORM OF FRANCHISE FINANCING BY KFC?
Although the parent company to KFC offers some forms of financing to their franchisees, the KFC Corporation itself does not offer, indirectly or directly, any form of financing to the franchisee before or after the commencement of operations at the store.
Please find below the financing programs offered by Yum!
- Yum Capital Financing Program: This form of financing will cover:
- The construction of a new unit.
- The acquisition of any existing unit
- The re-modelling of renovation of any existing unit
The maximum amount of cash that can be borrowed by the franchisee is $5,000,000 and the minimum that can be borrowed is $200,000
- The YUM Minority Lending Program: This program covers financing for franchisees that are buying an existing unit, or maybe buying an existing unit that is owned by the company. The franchisee is guaranteed 25% of up to $12,000,000 of the principal that the franchisee seek.
- Wells Fargo Equipment Financing: This is a financing program that directly involves Wells Fargo and other participating banks. The franchisee will benefit a credit extension for a period of time for the purpose of upgrading an existing outlet.
TRAINING BY KFC FRANCHISE
It is expected of every KFC Franchisee to attend a mandatory training to the franchisor’s satisfaction. A franchisee may assign a key operator to attend the Key Operator Training. Managers will also be expected to attend a mandatory leadership training, which will prepare them for the task ahead, especially when it comes to managing people: customers and the employees that serve the customers.
The training programs will include compute-based tutorials, written training, and on-site training at different KFC location.
OTHER INFORMATION AS RELATED TO YOUR KFC FRNCHISE UNIT
You will need to understand that the parent company of KFC Corporation, Yum! Brands is currently developing a multi-branding concept which combines two of its brands under a single roof at new locations.
For instance, you might have to share the same location with another Taco Bell franchisee, which is under the same Yum! Brands. This is being implemented to attract more customers and then also give them more options to choose from.