- 2023 Franchise 500 Rank
#13 Ranked #26 last year
- Initial investment
$1.9M - $3.8M
- Units as of 2023
28,475 16.7% over 3 years
When it comes to fast-food franchises, few are as popular as KFC. This Louisville, Kentucky-based franchise is the world's most popular chain restaurant focusing on chicken, potatoes and all-American food. It stems from the original "secret recipe" that flavors Colonel Harland Sanders’ chicken, complete with 11 distinct herbs and spices.
If you want to start a restaurant business without having to fight to capture part of the market, you might want to start a KFC franchise.
KFC franchise could be a great business opportunity, whether you are more of a general manager or hands-on restaurant operator willing to be "in the trenches" with your workers serving customers delicious meals.
While starting a KFC franchise could be a great idea, there are some key things you should consider before signing on the dotted line. Read on to learn more.
Why should you start a Kentucky Fried Chicken franchise?
Why jump on a KFC franchise opportunity? There are lots of reasons you might consider this business opportunity.
For example, about 185 million people see a KFC commercial once per week, which is more than half of the U.S. population. The KFC restaurant chain serves over 12 million customers daily across 115 countries and territories.
That adds up to over 17,000 restaurants around the world. Simply put, all of this adds to brand recognition through the Yum! Brands, Inc. conglomerate, which also owns Taco Bell and Pizza Hut.
When you sign on as a KFC franchisee, you’ll get immediate access to this brand recognition and can start running a successful restaurant immediately. KFC’s famous chicken recipe is still proprietary and secret, so what you offer your customers is something they can’t get anywhere else.
In addition, KFC has expanded its menu over the last several years. It doesn’t just offer fried chicken buckets.
It also offers chicken wings, chicken sandwiches and a variety of homestyle sides. This dedication to keeping its menu fresh has helped KFC stay market relevant for decades.
That’s not all, either. When you sign on as a KFC franchisee, you can choose to own and operate two different types of restaurants:
- Traditional restaurants are what you expect — standard KFC restaurants that offer full menus and seating.
- Nontraditional restaurants. Also called express outlets, these are smaller than traditional KFC outlets and offer limited menus. They usually operate at “captive” locations, like transport terminals, colleges, venues in business locations and malls.
Depending on your needs, either type of restaurant could be perfect for your business ambitions.
However, the monetary investment needed to start a nontraditional restaurant is notably cheaper than the upfront cash you need to start a traditional restaurant. That’s because it requires less real estate and fewer liquid assets/cash requirements.
This translates to accessibility. As a KFC franchise business owner, you have multiple options with which to start your entrepreneurial endeavors.
Is absentee ownership possible for KFC franchisees?
One of the limitations that come with KFC franchising is the lack of absentee ownership. Simply put, you must be on the floor running your restaurant in person should you choose this business route.
KFC is looking for franchisees with some successful business ownership experience already, although it will sign on new franchisees with the right drive and commitment.
You also need to have enough time to commit to managing your restaurant “on the floor” — expect to become a master of everything that KFC does it offers to its customers.
That, in turn, will affect your residence and home distance options. You'll need to be near your Kentucky Fried Chicken restaurant franchise so you can drive to the restaurant whenever you are on the clock.
Because of this, becoming a KFC franchise owner isn’t ideal for business owners who want part-time work or want to focus on other business opportunities. You’ll need to focus all your efforts on KFC to succeed in this business.
Related: Fast-Food Franchises Get Fresh
What resources and support does KFC offer franchisees?
Once your Franchise Agreement has been signed, KFC doesn’t simply back away and leave it all up to you. Instead, feel confident knowing that new franchisees get access to many support resources from corporate.
Let's start with a breakdown of marketing support. Marketing your KFC restaurant, especially in the run-up to opening day, can be tricky.
That's why KFC provides national and social media marketing support, helping you craft effective marketing campaigns and leverage advertisement templates to maximize the attractiveness of your new restaurant. This even extends to search engine optimization or SEO, which will help your local restaurant website attract local diners.
Then there’s the plethora of other support resources and programs KFC brings to the table.
For instance, you can attend meetings and conventions with fellow business owners and franchisees. You can also attend purchasing co-ops to get new supplies and resources on the cheap, bettering your bottom line.
Need help with training? KFC corporate is there to assist by providing field operations support. KFC will help you train new employees as you bring them onto your team.
It also provides training and support for safety and security procedures, which can be invaluable if you open a new restaurant downtown or in a metropolitan area.
All franchisees can access proprietary software and the franchisee intranet platform, helping you coordinate your business activities.
The toll-free line and online support resources will ensure that you never feel alone and that you always have a way to contact corporate if you experience a significant issue.
Related: More Fast-Food Franchises Go Lean
How much does starting a KFC franchise cost?
Starting a KFC franchise will take some money on your part upfront. First, you’ll need to pay an initial franchise fee of $45,000, as specified in the Franchise Disclosure Document (FDD).
After that, you’ll need to make an initial investment of anywhere from $1.4 million to $3.2 million. The exact franchise investment you’ll need to make depends heavily on location, expected profitability and the size of your restaurant.
To ensure that you have the cash for these investments, KFC requires new franchisees to have net worths of $1.5 million, plus cash reserves of $750,000.
That's a lot of initial money to get together. Remember that you'll also need to pay a royalty fee of between 4% and 5% once your business opens. The ad royalty fee of 5% can’t be forgotten, either.
Should you have enough money to pay for all this, you can sign a term of agreement that lasts 20 years. You can then renew the agreement term if you like your KFC franchise. If your restaurant has been successful thus far, you may be able to secure better terms, like lower royalty fees.
Does KFC offer financial assistance?
Fortunately, KFC doesn’t expect all new franchisees to have all of that money saved up. That’s why it has various business relationships with lenders and other third-party financing sources.
You can contact those sources to get financing for franchise fees, startup costs, equipment and inventory.
These business loans will eat into your bottom line for at least several years but will let you start a KFC franchise without being independently wealthy beforehand.
What training is required to open a KFC franchise?
Most franchisors have comprehensive training programs for new franchisees, and KFC is no different.
When you sign on as a new franchisee, you must complete a detailed training program that includes 1.5 days of classroom training and another 10 weeks of on-the-job training.
In a nutshell, the training program involves spending:
- One week in an orientation program.
- Two weeks with online training (the hours add up to about 1 ½ days).
- After several weeks in a certified restaurant, you can receive hands-on training and know what to expect when your restaurant is up and running.
On the plus side, KFC foots the bill for all the travel and lodging expenses you and your management team will have.
By the end of the training, you'll know how to run your KFC restaurant profitably, train new team members and create the world-famous chicken that the KFC restaurant brand is famous for.
Start a KFC franchise today
Starting a KFC franchise could be the best decision for your business career. Consider signing up on the KFC website today.
Check out Entrepreneur’s other guides and articles for more information about KFC and other franchise opportunities.
|Franchising Since||1952 (71 years)|
|# of employees at HQ||400|
This company is offering new franchisees throughout the US.
This company is offering new franchisees worldwide.
|# of Units||28,475 (as of 2023)|
Information for Franchisees
Here's what you need to know if you're interested in opening a KFC franchise.
Financial Requirements & Ongoing Fees
Here's what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.
Initial Franchise Fee
Definition: The initial fee paid to a franchisor to join their system
What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.
Definition: The total amount necessary to begin operation of the franchise
What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.
|$1,852,825 - $3,771,550|
Net Worth Requirement
Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company
What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
Definition: A ongoing fee paid to the franchisor on a regular basis.
What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.
Ad Royalty Fee
Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts.
What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.
Term of Agreement
Definition: The length of time your franchise agreement will last.
What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.
|Is franchise term renewable?||Yes|
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
|Third Party Financing||KFC has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll|
Training & Support Offered
Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.
|On-The-Job Training||10 weeks|
|Classroom Training||1.5 days|
Meetings & Conventions
Security & Safety Procedures
Franchisee Intranet Platform
Additional details about running this franchise.
|Is absentee ownership allowed?||No|
Can this franchise be run from home/mobile unit?
Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.
Can this franchise be run part time?
Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.
Are exclusive territories available?
Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened.
What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.
Interested in ownership opportunities like KFC? Request a free consultation with a Franchise Advisor now.
Franchise 500 Ranking History
Compare where KFC landed on this year's Franchise 500 Ranking versus previous years.
Curious to know where KFC ranked on other franchise lists? Find out below.
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