KFC FEASIBILITY

REPORT

SUBMITTED BY
NAZISH (57395)
RBANO (57418)

SHEHE

AMNA
UROOJ (57287)

M.AMMAD

(57563)

FAHAD

SABIR (57246)

KFC feasibility
I n t r o d u c t i o n

The pleasures of the table belong to all times and all ages,
to every country and every day, they go hand in hand with all
other pleasures, outset them and remain to console us for
their loss.
Restaurant business is one of the oldest known to man
and to a large extent is still an art and will remain so in future.
System and practices make the job of managing a hotel or
restaurant much similar, but the human element is difficult to
systemize. The field of restaurant business is interdisciplinary. It
draws up economics, psychology, management, food technology,
architecture and marketing clustered together. It is a business of
hospitality.
Multan is one of the oldest cities of Pakistan and is
expanding every day. The trend of the people of Multan is
drifting extensively towards modern means of socializing and
relaxation. Therefore, while starting our business, we want to

introduction a revolution in the business of restaurant. We plan

to introduce a restaurant of international standard, KFC, the
name require no explanation. It is a chain of restaurants
operating in more than 80 countries around the world from
Shanghai to Sao Polo; from the sand of Saudi Arabia to the
sidewalks of New York and now in Pakistan. Therefore, while
starting our business we have decided to open a restaurant in
the posh locality of Multan, and then extended to other parts.

Brief Description of Proposed Project

In this project we are introducing a Fast Food
Restaurant (KFC) in Multan.
` Project

Fast Food Restaurant

` Name

KFC

(Kentucky

Fried

Chicken)
` Project Site

Cantt. Locality,
Tipu Sultan Road.

` Total Area

2 Canals

` Operating Time

12:00AM 12:00PM
(Weekdays)

12:00AM 1: 00PM
(Sundays)
30 days a month,
12 months a year
` Project Capacity

150 People at a time

` Main Utilities

Original Recipe Deep Fried

Chicken,
KFC Special Chicken, Zinger
Burger,
Fillet Burger,
Soft

drinks

(produced

by

Pepsi),
` End Project

Opening

number

of

more

restaurants after success of project.

O p e r a t i o n

S t r a t e g y

The operation strategy of our restaurant will be designed

around the concepts of five senses. From our description research
of the industry we found out that restaurant business is one of
those rare services which touch all the five senses of human being.
The food will cater to the sense of taste, music to the
sense of sound, aroma of dishes to sense of smell, decor to the

sense of sight and clean crockery, cutlery and environment in

general to the sense of touch. Taking care of all five senses our
customers would be the core of our strategy.

Structure of Management:
Our business is a partnership which includes 6
partners investing capital.
Once it is decided that we are getting into business
the

question

arises

that

what

is

uncountable

list

of

occupations the point is what kind of business to be done. The

answer to this question may be found while considering
following factors:

Government Policy:
The factor of government policy plays a major role in
the success of any business. Before deciding to get into the
business. One must also keep in mind the advantages and
disadvantages of any business for the country. Earning money
by keeping the interest of the country at stake should not be
even thought of. The business must be chosen considering its
benefit to the country, in the shape of taxes, revenues and
overcoming unemployment.

Number of Consumers:
This factor is also of vital importance. This business
only flourishes when the demand of that product or number of
consumers is more. Thus, while choosing any business we
must see the field which provides maximum number of
consumers, so that the invested capital is not blocked or
wasted.

Demand of The Product:

Demand of the product by the user is also a key
feature before choosing any business. If the chosen business
in competition with others then one should not forget that profit
is divided. However, by producing quality product, this factor
could be dealt with properly and in our favors. One could fetch
more business if demand of the product increases.

General Trend of The Area:

One cannot do any business if it is started at a
place where the trend of the people is not favorable. Therefore,
before choosing the trend of people must be created for it.
Hasty decisions should be avoided. See to the fact, that

business

place

is

located

where

one

could

fetch

the

consumers. So the trend of consumer is also important before

selecting the business.

Budget Of Partners:
Before getting into business, the spirit should be
high, but always keeping in mind that it should be planed
within the available budget. It is an art to get maximum
benefits

by

spending

minimum

resources.

However,

the

element of risk and luck always becomes the major cause of

success of business. Therefore, always plan business by
keeping budget in mind.

Budget of Consumers:
The purchasing power and the real income of the
consumer should be kept in mind before choosing business.
By giving thorough study and elaborate discussions
on above-mentioned factors, we now have to choose business
out of unlimited jobs one could get into. After loads of thinking
and vast study, we all partners concluded that the business of
opening an outlet of an International Franchise Restaurant

could be the best for us. So we all decided to open a

restaurant where the full range of eatables of international
standard

are

provided

on

competitive

rates.

Since

the

occupants of the area, which is selected for this restaurant,

have a lot of trend for hoteling, therefore, we sincerely hope
and pray that this business would meet the required success.

The Scope Of The Project

The outlets of KFC all over the world and in Pakistan in
cities like Lahore and Karachi are meeting with unlimited success
day-by-day, resulting in expansion all over the world. Since people
have to eat, therefore, the business in eatables will not fail if
properly looked after by a team of dedicated lot. In Multan, there
are number of hotels and restaurants, cheap and expensive, but all
these places are always filled with people of different class. We
have felt that if conducted properly, this project could bring us luck.
We have also carried out surveys and have found that
almost 60% of the occupants have a trend of eating out with
families and friends. Moreover, this business also benefits the
government policies of unemployment also does not hinder the
government polices. A lot of revenue is paid to the government in
shape of excise duty and sales tax.

As we have selected one of the best spots in Multan,

therefore, we are sure that we will be able to compete with other
restaurants in surrounding areas. We are young, energetic and
honest. We want to stand on our feet; we want to bright in our
future with respect and dignity. With our honest efforts, we are
positive that this project will be able to meet the success.
We strongly believe that if success has to be met, then
we will have to put in our best and honest efforts to provide our
food to the entire satisfaction of consumers. We believe that we can
make a difference, we will demonstrate personal pride and
commitment in everything we do. We have a passion for making
things better and we have a positive outlook. We know working as
team always gets the best results. We will by the grace of God
work with all our zeal and enthusiasm.
By considering all above-mentioned factors of our
project, it is quite evident that we will compete in the market. The
scope of our project is good and the results will be prolific. The
location of business spot is already been mentioned which appears
to be the best in Multan. We intend covering our clients from all
part of the city mainly from cantonment area. The rest from
Gulgasht, Bosan Road, New Multan and Railway Colony. In future
we plan to introduce more outlets of KFC in different areas of
Multan.

M a r k e t

S u r v e y

The market survey was carried out with express

intention of its being factual and maximum possible care has been
exerted to use the best sources of information.
There are many ways through which market survey can
be conducted and the most popular method available entails about

80% of the facts considered and 20% of necromancy and judgment.

It would be true to say that the luck of statistical data would make
the study useless.
There are different ways through which market survey
can be conducted. It is only right, therefore to describe the various
ways of the market research, there are eight different types of
market research.
These are:

Consumer Research
Product Research
Market Research
Dealer Research
Price and Policy Research
Selling and Advertising Research
Ware Housing
Inventory Research,
Cost and Efficiency Studies
In order to conduct our market survey we aimed at:

Factual survey
The awareness information system

 The opinion survey

The attitude survey
The future inventory survey
The reason why survey.
To conduct a proper and a good survey, we divided the city in
to closes i.e. Upper Class and Middle Class.

Upper Class:
It includes the elite class of the city. It includes people
living in cantonment area, Tipu Sultan Road, Officers Colony,
Nasheman Colony, and few sprinkled here and there.
The people living in these are mostly rich and can afford
to have a good and expensive food.

Middle Class:
It includes mostly the people living in areas such as
Gulgasht, New Multan, Shah Rukn-e-Alam and Bosan Road. Most
people living in these areas belong to middle class.
The survey report results are as follows:
In order to provide our customers with pleasant
atmosphere and good quality of food, we need different types of
machinery and equipment.

Results of Market Research

Q.No.1:

How frequently in a month do you usually go out to

a restaurant?
By this question we wanted to know that at which time
we should be expecting more customers and the result
was that 76% people come out dinner, 19% at lunch and
5% at other.

Q.No.2:

Do you usually go out with your?

Friends

36%

Family

41%

Business Guests

23%

By this question we wanted to know what kind of

entertainment and atmosphere we should provide.
Q.No.3: How do you become aware of new restaurants?
We wanted to know in which field should we advertise
more. The results were that 30% come to now from
reviews of Mag. 29% TV, 21% Recommendation, 15% by
banners and 5% by Personal discovery.
Q.No.4:

Rate the following attributes according to their

importance for a restaurant?

We asked this question to know to focus more.

Quality of food

Quality of services

Q.No.5:

40%
=

Location

15%

Crowd

5%

Price

30%

10%

Would you like the new restaurant in:

Cantt. Locality 46%
Bosan Road

35%

New Multan

19%

Note: Future plans are to open KFC branches on Bosan Road and
in New Multan.
The following questions were asked from those who have
visited KFC.
(In Pakistan or Abroad)
Q.No.6:

On the scale of (15) how would you rate KFC?

1 for most Good 5 for least Good
90% people ranked KFC No. 2 and 10% ranked it as No.
1.

Tec h n i c a l

An a l y s i s

Types of Machinery
The different machines, which we need, are:
Several machinery is going to be supplied by KFC (USA)
Cooking Range:
For cooking purpose, we need specially designed
cooking range, which is systematically for cooking and baking at
different requirement temperatures.
Deep Freezers:
We need deep freezers to fulfil the requirements of our
customers.
In this section total expenses for our KFC restaurant are
given. From this survey of markets, we have estimated the least
price with good quality.

Air Conditioners:
We also want to provide good and pleasant atmosphere
so that people can enjoy food, therefore, we require 5 split units of
air conditioners.
Separate Stoves:
We also require a separate stove with eight terminals to
cook different foods in large quantity.
Deep Frier:
Deep frier is a basic necessary of fast food. It is needed
for frying French fries, chicken, etc. French fries are liked by almost
everyone, so we need a deep frier.
Cost of these pieces of equipment and total expenditure
on it is given in Financial Analysis.

F i n a n c i a l

An a l y s i s

In this section total expenses for our KFC restaurant

from this survey of market we have estimated the least price with
good quality.

Ownership Of Business:
Our business is on partnership basis and we have six
partners, each one investing his/her own capital, which is near
about Rs. 643,000 as franchise will cost us Rs. 20,000,000.

Fixed Cost:

Following are the costs, which will incur only once.

Commercialization Cost Of Land:

As we are constructing restaurant in a residential area,
so we go it commercialized at Rs. 8 lac /canal.
Total estimated commercialization cost of 2 canal
= Rs 1,600,000

Land:
The total land is 2 canal and the cost of land is in that
area is Rs. 180,000 per marla. So the total land cost is Rs.
7,200,000.

Construction:
The basic aim to open a KFC restaurant is to given an
ideal eating place with pleasant atmosphere. So we will construct
our restaurant in a way that it would catch the attention of our
customers.

Specifications:
Foundation
P.C.C. (1:4:8) in base.

Super Structure
B.B. in cement Mortar (1:5)
Walls
1 foot 1.5 inches thick, coated with hot bitumen, 2
coat and 2 sheets of polyethene to all external
walls.
Floors
Marble floors with 4 inches marble skirting.
Roof
R.C.C. roof slab (1:2:4) as per design.

Internal Finish
Cement mortar (1:2) ceilings;
Cement mortar (1:4) walls.
Internal & External Paint
Emulsion paints weather shield of off-white colour.

Wash Room:
Marble tiles for floors and glazed titles for walls.
Opening
Whole front will be of glass and wire gauze windows on
the inside.

Schedule of the Area

Total area

Total covered area

10800 squares feet

=

40 marlas

8000 square feet

29.6 marlas

Estimated cost
of construction

Rs. 800/sq. foot

Total estimated cost of construction

29.6 x 270 x

800
=

Rs. 6393600

The total cost includes cost of construction of building,

glass & lighting.
Total sitting capacity

150 persons

Air-conditioning Unit:
Five air-conditioner units will be installed to keep our
customers safe from the blazing heat of Multan and give them a
cool and relaxing atmosphere.
Cost of 1 air-conditioning unit = Rs. 8000
Cost of 5 air-conditioning units = Rs. 400,000

Furniture:
We will place high quality furniture to match the
standard of our restaurant.

Tables:
Several
arrangements.

tables

are

required

for

proper

sitting

Total 30 tables will be placed.

Cost of 1 table

Rs. 2000

Cost of 30 tables

Rs. 60,000

Chairs:
To make our customers comfortable, relaxed and
easy, we will buy specially designed chairs. Total 150 chairs will
be used.
Cost of 1 chair

Cost of 150 chairs (150x800)

Rs. 800
= Rs. 120000

Interior Decoration:
We have decided to decorate our restaurant with
beautiful scenery.
Cost of one moving scenery
Cost of 4 moving scenery

= Rs. 15,000
= Rs. 60,000

Deep Frier:
As French fries are the ever favorite of all
people of all ages, so deep frier will be bought.
Cost of 1 deep frier

= Rs. 2500

Cost of 5 deep frier (2500 x 5 ) =Rs.12500

Cooking Range:
We have decided to use a specially designed
cooking range provided by KFC for convenient and easy cooking.
Cost of 1 cooking range

= Rs. 100,000

Fresh Pepsi Maker:

Cost of 2 Fresh Pepsi Makers

= Rs. 40,000

Stove:
A special stove with eight terminals will be installed.
Cost of one stove
Number of Utensils

= Rs. 10,000

Number

Cost of each

Total cost

of units

(unit) (Rs.)

Dishes

200

50

Rs. 10000

Forks

300

Rs. 2400

Disposable Glasses

200/day

Rs. 600

(of KFC)
Rs. 13000

Total
Total fixed cost =

Rs. 170,09,100

Variable Costs:
These are the costs, which are subject to change,
these costs are taken

Salary of the Manager (Per month)

= Rs. 18000

Salary of 5 Chefs (4000 x 5)

= Rs. 20,000

Salary of 3 receptionists

= Rs. 5,200

Salary of Waiters (10x1200)

= Rs. 12000

Salary of Security Guard

= Rs. 2,000

Salary of 4 Sweepers(1200 x 4)

= Rs. 4800

Charges of Waste Buster Van

Monthly Utilities Bill
Total

= Rs. 400
= Rs.80,000
= Rs. 142400

Total accrued cost of ingredients per month

like buns, eggs, beef, chicken, spices assorted,

vegetables, soft drinks, Monthly Tax
= Rs. 427,675 + 80,000
= Rs. 507,675
Total variable cost (142400 + 507,675) = Rs. 650075

Advertisement Expense:
We are entering in the market with the large advertisements. So, for this reason, we would
have a large advertisement expense.

Advertisement Through Newspapers:

Many daily and weekly newspapers are published in Multan. The people of Multan
frequently read newspapers, thats why we advertise our restaurant by these newspapers.

The main daily newspapers published in Multan are:

Nawa-I-Waqt
Din
Khabrain
Among English newspapers, important one is This News our ads. Will be given in Urdu
newspapers, 10 days before the opening ceremony of Restaurant and then 30 days after it.

Rates:
Nawa-i-Waqt and Din

= Rs. 1,700 per ad on 2 nd page

Size

= 3 col x 10 cm
Khabrain

= Rs. 1,200 per ad.

Dimensions of ad. = 3 col x 10 cm on 2 nd page

Expenditure of Nawa-i-waqt (1,700 x 40)

= Rs.68,000

Expenditure of Din (1,700 x 40)

= Rs.68,000

Expenditure of Khabrain (1,200 x 40)

= Rs.48,000

Total expenditure

= Rs.184,000

Ads. will be given in English Newspaper The News.

We will advertise KFC Restaurant in The News for complete
one month.
Rates:
The News

Rs. 1.800 per ad.

Dimension

3 col x 10 cm on 2 nd page

Expenditure

(1,800 x 30)

Rs. 54,000

Advertisement Through Television:

In Pakistan, we have three TV channels that are PTV, Channel-3 PTV World. But we
have chosen PTV for the advertisement of our KFC Restaurant, because it is the most popular
TV channel in Multan.

3 ads. will be displayed during Drama Hour

2 ads. will be displayed after Khabarnama.
These ads will start one week before the inauguration of
our restaurant and will last till the end of next three weeks.
Rates:
During Drama Hour (7-9 PM),
3 ads of 10 sec @ 3,800

= Rs. 11,400

After Khabarnama (9PM 12 AM),

2 ads of 10 sec. @ 3,300

= Rs. 6,600

Daily Cost (11,400 + 6.600)

= Rs. 18000

Total Adv. Exp. (8000 x 30)

= Rs. 540000

Advertisement Through Printed Material:

We will also advertise through printed material like banners, handbills, signboards, and
stickers. This is important way of advertising because these printed materials almost cover the
whole city. Those people who miss ads. on TV or those who cannot read newspaper, will
certainly see this material.

Cost:
30 banners @ Rs. 300

= Rs. 9,000

4 signboards @ Rs. 8,000

= Rs. 32,000

15,000 handbills @ Rs. I.5

= Rs. 22,500

15,000 stickers @ Rs. 1

= Rs. 15,000

Total Cost

= Rs. 78,500

Total Advertising Expense:

Newspapers

= Rs 238,000

TV Media

= Rs. 540000

Printed Media

= Rs. 785,000

Total

= Rs. 1563000

Revenues: We have found out our revenues on average basis

per month. The name of items available in our restaurant, their
prices and quantity sold will be given as follows:

Category No. 1 Burgers

Name
KFC Zinger

Rate
100

Quantity Sold

Revenue

6000

600000

Fillet Burger

80

4500

360000

Masala Burger

50

6000

240000
1200000

Total
Note: These Burgers are specialty of KFC

Category No. 2 Soft Drinks

Name

Rate

Quantity Sold

Revenue

Pepsi

15

2000

30,000

Marinda

15

15000

22500

7 up

15

1000

15000
67500

Total
Note: Pepsi is sponsoring KFC all around the world.

Category No. 3 KFC Chicken

Name

Rate

Quantity Sold

Revenue

10 PCS Plate

450

150

67500

8 PCS Plate

400

250

100000

5 PCS Plate

325

400

130000

3 PCS Plate

250

500

125000
422500

Total

Note: These Chicken Plates are Main Utility of KFC ,So the total revenue per
month is Rs. 1690000

Break-even Point:
The break-even point is the point where the total revenue is equal to the total cost. This
point shows that after how much time we can get our profit.

Break-even point :
Cost

C(x) = R(x)

= Fixed Cost + Variable Cost

= 18572100 + 650075 (x)
where x = months

18572100 + 650075x = 1690000 (x)

1690000x 650075x = 18572100

1039925x

= 18572100

= 17.9

So we can achieve our break-even point in 17 months and 28 days.

A s s u m p t i o n s
While considering our project, we have taken the following assumptions:

1. We have assumed that as our business moves towards

success, we will offer different discount packages
for our customers and will give special discount to
the students. Eventually this will increase our sales.
2. We have assumed that we will try to compete all the
existing firms in this field.

3. Our restaurant will remain opened for the full week and
also during special holidays like Eid, 14 th August,
etc.
4. There may be a variation in the price of the ingredients,
which we will be using with respect to taxes.
5. We are assuming that no other international chain
restaurant will be opening in Multan for two years.