KFC Franchise Cost & Fees

Date of Incorporation: 1939

Franchising Since: 1952
Headquarters: Louisville, Kentucky
Business Description: KFC outlets prepare and sell chicken,
snackables and other approved menu items using the certain
trademarks and trade secrets owned by KFC Corporation. The
franchisor is KFC Corporation (KFCC) whose parent is YUM!
Brands, Inc.
Franchise Offer: The licensee will operate a KFC outlet, which
are characterized by a unique system which includes special
recipes and menu items, distinctive design, dcor and furnishings,
specifications and procedures for operations procedures for quality
control; training and assistance; and advertising and promotional
programs.
Financial Assistance: Parent company YUM offers two financing
programs. Except as described below, KFCC does not offer, directly
or indirectly, any arrangements for financing the franchisees initial
investment or the continuing operation of the KFC business.
1.
YUM Funding Financing Program: Funding is available
to finance: (1) the construction of new (multi-brand or single
-brand) outlets; (2) the conversion of single-brand outlets into
multi-brand outlets; (3) upgrades of outlets as required under the
applicable franchise agreement; and (4) the purchase of existing
KFC, Pizza Hut or Taco Bell restaurants from YUM. The maximum
amount that may be borrowed by any one franchisee is
$5,000,000. The minimum loan amount is $200,000.
2.
YUM Minority Lending Assistance Program: Optional
lending assistance program for qualified minorities. The term
"minorities" is defined by the United States Small Business
Administration for its business development programs at 15 U.S.C.
Section 631(f)(1)(C) and it includes African Americans, Hispanic
Americans, Native Americans, Indian tribes, Asian Pacific
Americans and other minorities. If the franchisee meets YUM's
criteria for the Program and YUM agrees to allow the franchisee to
participate, then YUM's lending assistance will take the form of
YUM guaranteeing 25% of the principal of the franchised business
loan up to a maximum of $3,000,000 per loan or franchisee.

Training and Assistance: The franchisee, manager and the

other employees indicated by KFCC must attend and complete to
KFCC's satisfaction the initial training program offered by KFCC on
the operation of a KFC outlet. At KFCCs discretion, other
employees must attend and complete the training program to
KFCs satisfaction. Training programs may include written material
and classroom instruction.
Territory: The franchisee will have a protected territory of the
smaller of a radius of 1 miles of the KFC outlet, or an area
around the KFC outlet containing 30,000 people. The franchisees
rights with respect to the protected territory will not be dependent
upon achievement of a certain sales volume, market penetration
or other performance factors. Within the protected territory, KFCC
will not use or permit others to use in selling food products, any of
the Marks that the franchisee has the right to use under the
franchise agreement, except for (a) special event sales and (b) in
some cases, food products (other than chicken in whole pieces)
using the name or image of Colonel Sanders. The outlet may only
be relocated with KFCC's advanced written approval.
Term of Agreement and Renewal: The term of the franchisee
agreement is 20 years. Renewal terms are dependent on the
franchise agreement signed.
Obligations and Restrictions: During the term of the franchise
agreement the franchisee or a fully -trained and qualified manager
must devote full time to the management and operation of the
KFC outlet. The franchisee is responsible for the full performance
of the franchise agreement and, if the franchisee is a corporation,
one or more of the shareholders may be required to individually
guarantee the performance of the obligations under the franchise
agreement. The franchisee must sell all Required Products as
KFCC periodically designates. The franchisee may not deliver any
product from the KFC outlet or anywhere else unless separately
approved for delivery and have signed a Delivery Amendment. The
franchisee may cater (not including delivery), and make sales at
special events only the franchisee complies with KFCC's
procedures.
Estimated Number of Units: 18,775

Investment Tables:
Initial Investment
Free Standing Outlet
Name of Fee
Application & Background Check
Fee (per person)
Initial Franchise Fee
Training Expenses
Permits, Licenses, and Security
Deposits
Development Services Fee
Property
Building & Site Costs
Equipment, Signage, and Dcor,
POS & MERIT
Start-up Inventory
Grand Opening Expense
Additional Funds
Total Estimated Expenditure
Other Fees
Type of Fee

Royalty

Local Advertising
National Co-op
Renewal

Low

High

$300

$500

$45,000
$2,500

$45,000
$9,500

$50,000

$100,000

$0
$35,000
$400,000 $1,100,000
$415,000 $768,000
$280,000

Transfer

Audit

$385,000

$10,000
$10,000
$5,000
$5,000
$50,000
$75,000
$1,262,800 $2,543,000

Amount
5% of gross revenues or a
minimum of $825, whichever is
greater per month (minimum fee
subject to adjustment based upon
the Consumer Price Index).
0.5% of gross revenues (or as
agreed to with local advertising coops).
4.5% of gross revenues.
$6,750 (subject to adjustment based

Administrative

upon the Consumer Price Index) if

the Letter Agreement is signed. If
franchisees signs certain
Amendments, they have no right of
renewal.
For existing franchisees $3,375 for
first outlet and $1,688 for each
additional outlet in the same
transaction.
For new franchisees $6,750 for first
outlet and $3,375 for each
additional outlet in the same
transaction.
Entire cost of audit, including
expenses of auditing personnel.
$500 services fee for each
transaction in which KFCC
processes changes to franchisees
corporate structure or when
processing other approved
modifications.
$0 - $2,000

Additional Services
Costs, expenses and
Will vary
attorneys' fees
Indemnification
Will vary
Late royalty payments 1 - 1.5% per month
Food Standards
$322.50 per follow-up assessment.
Consultations (FSC)
Support Services and
Software Maintenance
$160.34 per unit per month.
for KFCC's MERIT
System
The above information has been taken from the FDD of KFC. Year
of FDD: 2014