What are the
Initial franchise fee
Initial Franchise Fee ($45,000)
The initial franchise fee for a standard Franchise Agreement with KFC is $45,000. This fee is payable in two parts: a Deposit Fee of $20,000 upon signing the Deposit Agreement, and an Option Fee of $25,000 upon signing the Option Agreement.
Royalty Fee (4% to 5% of Gross Revenue or a minimum of $1,350, whichever is greater, per month)
Franchisees are required to pay a monthly royalty fee of 4% to 5% of the prior month's Gross Revenue for each Restaurant franchised under the agreement, or a minimum of $1,350, whichever is greater.
Advertising (Not to exceed 5% of Gross Revenue)
The Franchise Agreement states that KFC will not require franchisees to pay more than 5% of Gross Revenue for advertising purposes.
The rent is variable and is agreed upon in the lease agreement if the property is leased from KFC.
Training Fees ($500 per person per week for Additional/Refresh Training)
Franchisees are required to pay $500 per person per week for Additional/Refresh Training as incurred.
Transfer Fee ($4,500 for the first Outlet and $2,250 for each additional Outlet in the same transaction)
Upon the sale of a franchise or other transfer, a transfer fee is applicable. This fee is $4,500 for the first Outlet and $2,250 for each additional Outlet in the same transaction.
How much does
to start a
The total estimated initial investment for a newly constructed KFC outlet ranges from $1,852,825 to $3,771,550. Below is a detailed breakdown of these costs, offering a clear view of the financial landscape you're stepping into.
Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.
Franchisees are granted the right to operate a KFC Restaurant within a defined area referred to as the "Protected Area." Within this Protected Area, they are obligated to develop and operate the Franchised Restaurants.
However, while there are some territorial rights associated with the Protected Area, these rights do not guarantee exclusivity. Specifically, franchisees may face competition from other franchisees, from Company-Owned Outlets, or from other channels of distribution or competitive brands that KFCLLC controls.
Within the Protected Territory, KFCLLC will not use, or permit others to use in selling food products, any of the Marks that franchisees have the right to use under the Franchise Agreement.
be run as
KFC mandates that either the franchisee or a fully-trained and qualified unit manager must devote full time to the management and operation of the Outlet.
If the franchisee is a corporation, entity, partnership, or has more than one owner, a 'Control Person' must be designated. This individual has the authority to and actively directs the business affairs of the corporation or entity with respect to the Outlet.
The franchisee is responsible for hiring all managers and employees for the Outlet, and these individuals must complete the training programs that KFCLLC may require. The manager is not required to have an equity interest in the business.