The KFC franchise requires a total investment of $135K – $540K with a 5.0% royalty fee and operates 3,558 units in the QSR category. This report analyzes the full Franchise Disclosure Document including unit economics, fee structure, growth trends, and risk indicators to help you evaluate the cost of investing in KFC.
Critical issues identified from FDD analysis that warrant serious consideration before investing.
Composite quality score based on growth, stability, efficiency, fees, transparency, and system size.
Estimated initial investment range as disclosed in the most recent FDD.
| Line Item | Low Estimate | High Estimate |
|---|---|---|
| Franchise Fee | $135,000 | $540,000 |
| Working Capital | $0 | $0 |
| Total | $135,000 | $540,000 |
| Other | $575 | $2,500 |
| Other | $20,000 | $20,000 |
| Other | $25,000 | $25,000 |
| Training | $5,000 | $8,000 |
| Other | $50,000 | $100,000 |
| Real Estate | $300,000 | $1,000,000 |
| Buildout | $200,000 | $1,900,000 |
| Equipment | $375,000 | $606,000 |
| Inventory | $10,000 | $10,000 |
| Other | $5,000 | $5,000 |
| Insurance | $7,250 | $10,050 |
| Other | $5,000 | $10,000 |
| Working Capital | $50,000 | $75,000 |
| Total | $1,052,825 | $3,771,550 |
Ongoing fees as disclosed in the FDD.
| Fee Type | Rate | Type | Basis | Frequency |
|---|---|---|---|---|
| Development Fee | $45,000 | VARIABLE | Per new Outlet committed to develop | annually |
| Royalty | 5.0% | PCT | Gross Revenue | monthly |
| National Co-Op | 4.5% | PCT | Gross Revenue | monthly |
| Renewal | $9,600 | FIXED | Per renewal | one_time |
| Transfer to an existing KFCLLC franchisee | $4,800 | VARIABLE | Per transfer transaction | one_time |
| Transfer to a new KFCLLC franchisee | $9,600 | VARIABLE | Per transfer transaction | one_time |
| Audit | N/A | VARIABLE | Entire cost of audit including auditing personnel expenses | one_time |
| Additional/Refresh Training | $500 | FIXED | Per person per week | one_time |
| Administrative services fee | $500 | FIXED | Per transaction | one_time |
| Late royalty payments | 1.5% | PCT | Per month on late royalty payments | monthly |
| Restaurant Operations Compliance Check (ROCC) re-evaluation | $216 | VARIABLE | Per re-evaluation | one_time |
| Technology Fees | $297 | FIXED | Per month per Outlet | monthly |
| One System Fund Fee | $180 | FIXED | Per Outlet per month | monthly |
| Digital Fee | 3.5% | PCT | Gross Revenue collected from all Digital Orders | monthly |
| Liquidated Damages | N/A | VARIABLE | Calculated based on average annual Gross Revenue of New Outlets | one_time |
| Costs, expenses, and attorneys' fees | N/A | VARIABLE | Actual costs incurred | one_time |
| Indemnification | N/A | VARIABLE | All matters arising from Outlet operation or Development Agreement | one_time |
Financial performance data as disclosed in FDD Item 19.
| Metric | Value | Unit | Cohort | Period |
|---|---|---|---|---|
| Average Net Sales | $1,353,270 | USD | Company-Owned | FYE 2024 |
| Median Net Sales | $1,271,426 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product | $433,046 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product as % of Net Sales | 32.0% | PCT | Company-Owned | FYE 2024 |
| Average Cost of Labor | $483,879 | USD | Company-Owned | FYE 2024 |
| Average Cost of Labor as % of Net Sales | 35.8% | PCT | Company-Owned | FYE 2024 |
| Average Net Sales | $1,346,289 | USD | Franchisee Owned | FYE 2024 |
| Median Net Sales | $1,283,574 | USD | Franchisee Owned | FYE 2024 |
| Average Net Sales | $1,346,365 | USD | All Units | FYE 2024 |
| Median Net Sales | $1,283,149 | USD | All Units | FYE 2024 |
| Average Net Sales | $1,353,270 | USD | Company-Owned | FYE 2024 |
| Median Net Sales | $1,271,426 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product | $433,046 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product as % of Net Sales | 32.0% | PCT | Company-Owned | FYE 2024 |
| Average Cost of Labor | $483,879 | USD | Company-Owned | FYE 2024 |
| Average Cost of Labor as % of Net Sales | 35.8% | PCT | Company-Owned | FYE 2024 |
| Average Net Sales | $1,347,780 | USD | Franchisee Owned | FYE 2024 |
| Median Net Sales | $1,286,726 | USD | Franchisee Owned | FYE 2024 |
| Average Net Sales | $1,347,840 | USD | All Units | FYE 2024 |
| Median Net Sales | $1,285,522 | USD | All Units | FYE 2024 |
| Average Net Sales | $1,287,959 | USD | Franchisee Owned | FYE 2024 |
| Median Net Sales | $1,125,457 | USD | Franchisee Owned | FYE 2024 |
| Average Net Sales | $1,287,959 | USD | All Units | FYE 2024 |
| Median Net Sales | $1,125,457 | USD | All Units | FYE 2024 |
| Average Net Sales | $1,364,255 | USD | Company-Owned | FYE 2024 |
| Median Net Sales | $1,271,426 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product | $436,822 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product as % of Net Sales | 32.0% | PCT | Company-Owned | FYE 2024 |
| Average Cost of Labor | $485,902 | USD | Company-Owned | FYE 2024 |
| Average Cost of Labor as % of Net Sales | 35.6% | PCT | Company-Owned | FYE 2024 |
| Average Net Sales | $1,369,145 | USD | Franchisee Owned | FYE 2024 |
| Median Net Sales | $1,306,689 | USD | Franchisee Owned | FYE 2024 |
| Average Net Sales | $1,369,079 | USD | All Units | FYE 2024 |
| Median Net Sales | $1,306,316 | USD | All Units | FYE 2024 |
| Average Net Sales | $1,364,255 | USD | Company-Owned | FYE 2024 |
| Median Net Sales | $1,271,426 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product | $436,822 | USD | Company-Owned | FYE 2024 |
| Average Cost of Product as % of Net Sales | 32.0% | PCT | Company-Owned | FYE 2024 |
| Average Cost of Labor | $485,902 | USD | Company-Owned | FYE 2024 |
| Average Cost of Labor as % of Net Sales | 35.6% | PCT | Company-Owned | FYE 2024 |
| Average Net Sales | $1,371,146 | USD | Franchisee Owned | FYE 2024 |
| Median Net Sales | $1,309,730 | USD | Franchisee Owned | FYE 2024 |
| Average Net Sales | $1,371,050 | USD | All Units | FYE 2024 |
| Median Net Sales | $1,308,815 | USD | All Units | FYE 2024 |
| Average Net Sales | $1,285,615 | USD | Franchisee Owned | FYE 2024 |
| Median Net Sales | $1,151,534 | USD | Franchisee Owned | FYE 2024 |
| Average Net Sales | $1,285,615 | USD | All Units | FYE 2024 |
| Median Net Sales | $1,151,534 | USD | All Units | FYE 2024 |
Based on financial performance data disclosed in Item 19 of the FDD.
| Line Item | Amount | % of Revenue |
|---|---|---|
| Gross Revenue | $1,151,534 | 100% |
| COGS | $-368,491 | 32.0% |
| Labor | $-409,946 | 35.6% |
| Occupancy | $-0 | 0% |
| Marketing | $-0 | 0% |
| Other Costs | $-0 | 0% |
| Royalty Fee (franchisor) | $-57,577 | 5.0% |
| Ad Fund Fee (franchisor) | $-51,819 | 4.5% |
| Owner's Profit | $263,701 | 22.9% |
Model your personal financial scenario by adjusting the assumptions below.
Automated risk indicators based on FDD data analysis.
Franchise unit trajectory based on FDD Item 20 data.
| Year | Start | Opened | Closed | Transferred | End | Closure Rate | Net Growth |
|---|---|---|---|---|---|---|---|
| 2022 | 3872 | +53 | -83 | 73 | 3842 | 2.1% | -30 |
| 2023 | 3842 | +30 | -156 | 34 | 3715 | 4.1% | -127 |
| 2024 | 3715 | +28 | -151 | 168 | 3558 | 4.1% | -157 |
How KFC compares to peer brands in the QSR category.
Ratio = Investment midpoint ÷ median annual revenue. Lower is better. A 0.5x ratio means the initial investment equals half of one year's gross revenue. Does not account for operating costs, margins, or time value of money.
| Brand | Total Units | Investment Range | Median Revenue | Royalty | Inv/Rev Ratio |
|---|---|---|---|---|---|
| Subway | 19502 | $3K – $630K | No Item 19 | -- | -- |
| McDonald's | 12772 | $1.47M – $2.64M | No Item 19 | 5.0% | -- |
| Dunkin' | 8499 | $527K – $1.83M | $1.43M | -- | 0.8x |
| Domino's Pizza | 7043 | -- | $24K | 5.5% | -- |
| Burger King | 6701 | -- | No Item 19 | -- | -- |
| Wendy's | 5552 | $393K – $2.99M | $2.23M | 4.0% | 0.8x |
| Little Caesars | 3705 | $446K – $1.82M | No Item 19 | 6.0% | -- |
| KFC | 3558 | $135K – $3.77M | $1.27M | 5.0% | 1.5x |
| Papa John's | 3291 | $261K – $853K | No Item 19 | 5.0% | -- |
| Popeyes Louisiana Kitchen | 3177 | $505K – $3.92M | No Item 19 | 5.0% | -- |
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