KFC Franchise Costs, Fees & FDD

Year Business Began: 1939

Franchising Since: 1952

Headquarters: Louisville, Kentucky

Estimated Number of Units: 31,980

Franchise Description: The franchisor is KFC US, LLC (KFCLLC) whose parent is YUM! Brands, Inc.  Franchisees operate a dine-in and carryout KFC outlet, which prepares and sells chicken and other approved menu items. The Franchise Agreement grants franchisees a license to use (i) certain KFC trademarks, trade names, service marks, logos and commercial symbols the franchisor periodically authorizes, including the “KFC” and “Kentucky Fried Chicken” marks; and (ii) the proprietary business formats, methods, procedures, designs, layouts, standards and specifications the franchisor authorizes, solely in connection with the operation of the outlet.

Training Overview: Franchisees (or if they are an entity, the control person) must attend and complete, to the franchisor’s satisfaction, the initial training program offered by KFCLLC on the operation of an outlet. Franchisees will designate a key operator, subject to the franchisor’s approval, to complete the Key Operator Restaurant Training. At the franchisor’s direction, other employees of franchisees must attend and complete the training program to KFCLLC’s satisfaction. All training programs will be scheduled, as needed, at KFCLLC's designated national, regional or divisional offices or other places as the franchisor may designate. Training programs include computer-based training through the franchisor’s Learning Management System program, online learning, written material, on-the-job training at other outlets and classroom instruction. The individual who completes the Key Operator Restaurant Training will train employees at the outlet. The franchisor may require franchisees and their employees attend and complete additional and ongoing refresher training courses, programs and seminars at such times and locations that KFCLLC reasonably requires.

Territory Granted: Franchisees will not receive an exclusive territory. However, so long as franchisees are in compliance with the Franchise Agreement, they will have a protected territory of the smaller of (i) a radius of 1.5 miles of the outlet, or (ii) an area around the outlet where 30,000 people reside, or, in the case of a metropolitan area containing more than 100,000 people, within which 30,000 people reside or work (the protected territory). The franchisee’s 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, the franchisor 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, 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. Franchisees may only sell approved products at the outlet except for (i) catering and special event sales and (ii) delivery sales made only in accordance with KFCLLC’s catering and special events procedures and under a form it requires.

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 outlet. If franchisees are a corporation, entity, partnership or have more than one owner, they must also designate a “control person,” who is the individual with the authority to and actively direct the business affairs of a corporation or entity with respect to the outlet. Individual owners and individual owners’ spouses must also sign the Guaranty or Spousal Consent (as applicable) in their individual capacities. Franchisees must sell all required products as the franchisor periodically designates. Franchisees may not deliver any product from the outlet or anywhere. Franchisees may cater and make sales at special events, only if franchisees meet the franchisor’s catering and special event procedures; and in the case of catering and special event sales involving delivery, sign an addendum required by KFCLLC.

Term of Agreement and Renewal: The length of the initial franchise term is 20 years. If they meet the requirements franchisees can renew but may be asked to sign a contract with materially different terms and conditions than the original contract.

Financial Assistance: Yum (KFC parent company) has entered into an arrangement with a third-party, LS BDC Adviser, LLC, an affiliate of Lafayette Square Holding Company, LLC (lender), pursuant to which lender (through one or more of its managed or advised funds) may provide financing to qualified franchisee applicants, including low-to moderate income individuals in underserved American communities. In addition to Yum’s arrangement with LS BDC Adviser, Yum may, but is not obligated to, provide similar lending assistance to qualified franchisee applicants who receive financing from other lenders. Except as described, KFCLCC does not offer, directly or indirectly, any arrangements for financing a franchisee’s initial investment or the continuing operation of the KFC business.

Estimated Initial Investment

Name of Fee	Low	High
Background Check Fee (per person)	$575	$2,500
Deposit Fee	$20,000	$20,000
Option Fee	$25,000	$25,000
Training Expenses	$5,000	$8,000
Permits, Licenses, and Security Deposits	$50,000	$100,000
Real Property	$300,000	$1,100,000
Building & Site Costs	$1,000,000	$1,900,000
Equipment, Signage, and Décor, POS & MERIT	$375,000	$606,000
Start-up Inventory	$10,000	$10,000
Grand Opening Expense	$5,000	$5,000
Insurance	$7,250	$10,050
Miscellaneous Costs	$5,000	$10,000
Additional Funds	$50,000	$75,000
ESTIMATED TOTAL*	$1,852,825	$3,771,550

*The estimated initial investment range covers new “traditional” restaurant types. There is a separate FDD for “express” restaurant types.

Other Fees

Type of Fee	Amount
Royalty	4% to 5% of gross revenue or a minimum of $1,440, whichever is greater, per month (minimum fee subject to adjustment based upon the Consumer Price Index).
National Co-Op	4.5% of gross revenue.
Renewal, if applicable	$9,600 (subject to adjustment based upon the Consumer Price Index).
Transfer to an Existing KFCLLC Franchisee	$4,800 for the first outlet and $2,400 for each additional outlet in the same transaction.
Transfer to a New KFCLLC Franchisee	$9,600 for the first outlet and $4,800 for each additional outlet in the same transaction.
Audit	Entire cost of audit, including expenses of auditing personnel.
Additional Refresh/Training	$500 per person per week.
Administrative	$500 administrative services fee for each transaction in which the franchisor processes changes to the franchisee’s corporate structure, or when processing other approved modifications.
Costs, Expenses and Attorneys' Fees	Will vary.
Indemnification	Will vary.
Late Royalty Payments	1.5% per month.
Restaurant Operations Compliance Check (ROCC) – comprised of two categories: (1) Food Safety Compliance Check (FSCC) and (2) Operations Standards Compliance Check (OSCC) Re-evaluation	ROCC evaluation: $216 per evaluation. FSCC evaluation: $156 per evaluation.
Technology Fees	Currently, $297.39 per month.
One System Fund Fee	$180 per outlet/per month (plus applicable tax and shipping) (reoccurring payments).
Digital Fee	3.5% of gross revenue collected from all digital orders.

The above information has been compiled from the FDD of KFC. Year of FDD: 2025.
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