KFC
Date of Incorporation: 1939
Franchising Since: 1952
Headquarters: Louisville, Kentucky
Country: U.S.
Description: KFC Corporation’s parent is YUM! Brands, Inc, a.k.a. Tricon Global Restaurants, Inc. KFC outlets prepare and sell chicken, snackables and other approved menu items using the certain trademarks and trade secrets owned by KFC Corporation.
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, décor and furnishings, specifications and procedures for operations procedures for quality control; training and assistance; and advertising and promotional programs.
Financial Assistance: The franchisor does not offer any direct or indirect financing, nor do they guarantee any note, lease or obligation.
Training and Assistance: The franchisee or their manager and at least one other key operator must attend and complete to KFC Corporation’s satisfaction the training program offered by KFC corporation. At KFC’s discretion, other employees must attend and complete the training program to KFC’s satisfaction. The franchisor, their managers and other employees must also attend such additional courses, programs and seminars as KFC may require. The training program will last approximately four days, with sessions lasting 8 to 10 hours a day. KFC will also offer assistance in the areas of customer service, general outlet management, quality control, new product preparation and equipment maintenance.
Territory: The franchisor does not have any protected radius or exclusive area for the sale of KFC’s products. The franchisor may face competition from other franchisees, from restaurants that the franchisee own, or from other channels of distribution or competitive brands that the franchisor or their affiliates control.
Term of Agreement and Renewal: The term of the franchisee agreement is 5 years upon payment of initial fee and up to a maximum 20 years upon payment of a fee of $1,000 per year after the first 5 years.
Obligations and Restrictions: The franchisor is responsible for the full performance of the licensing agreement. One or more of the franchisee shareholders (if a corporation), each partner (if a partnership) or each member (if a limited liability company) may also be required to individually guarantee the performance of the obligations under the licence agreement. KFC does not have the right to approve the manager of the franchisee’s KFC outlet or impose any limitations as to whom they may hire. The franchisee must sell all required products as KFC periodically designated.
Total Number of Units: KFC operates more than 5,200 restaurants in the United States and more than 16,000 units around the world.
Investment Tables:
Initial Investment:
| Expenditure | Low | High |
|---|---|---|
| Initial Franchise Fee | $45,000 | $45,000 |
| Development Services Fee | Varies | Varies |
| Real Property | $400,000 | $1,000,000 |
| Construction and Leasehold Improvements | $575,000 | $915,000 |
| Equipment/Signage | $216,000 | $366,000 |
| Opening Advertising | $5,000 | $5,000 |
| Opening Inventory | $10,000 | $10,000 |
| Utility Deposits and Business Licenses | $7,000 | $7,000 |
| Initial Training | $3,900 | $10,000 |
| Miscellaneous Opening Costs | $5,000 | $15,000 |
| Additional Funds (3 months) | $13,000 | $18,000 |
| Total | $1,379,900 | $2,391,000 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty | The greater of 5% of gross revenues, or a minimum of $825 per month (minimum fee subject to adjustment based upon the Consumer Price Index) |
| Local Advertising | 3% of gross revenues |
| National Cooperative Advertising | 2% of gross revenues |
| Renewal | $6,750 (subject to adjustment based upon the Consumer Price Index) |
| Transfer | $6,750 or $3,375 if the transferee is an existing KFC franchisee |
| Audit | Entire cost of audit, including expenses of auditing personnel |
| Administrative | $500 fee for KFC's administrative service in processing changes to corporate structure |
| Additional Services | As determined by KFC |
| Costs, expenses and attorneys' fees | Will vary |
| Indemnification | Will vary |
| Late royalty payments | 1-1/2% per month |
| Food standard consulatants | $265 per follow-up assessment |
Date of FDD: 2009
The above information has been compiled from the FDD of KFC along with online sources.
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