How to Open a KFC Franchise | Costs & Info

KFC Franchise

Colonel Sanders started serving up his addictive, top-secret chicken recipe in the 1930s, and the first Kentucky Fried Chicken franchise opened in Salt Lake City in 1952. Since then, the iconic American brand has turned into an international phenomenon with 17,000 restaurants worldwide, serving more than 12 million customers a day.[1]

With stats like those, it only stands to reason that so many prospective franchisees are interested in opening a KFC franchise. This guide will help you determine if owning a KFC franchise is the right fit for you, as well as exactly how to open a franchise and how much capital you’ll need.

Let’s get started.

KFC Franchise Overview

KFC franchise fast facts:

  • Initial franchise fee: $45,000
  • Initial franchise term: 20 years
  • Estimated initial costs: $1.3 million to $2.6 million

To kick things off, we’ll go over some details about the KFC brand. The KFC Corporation is owned by Yum! Brands, a Louisville, Kentucky-based conglomeration, which also owns fast food heavy-hitters Taco Bell and Pizza Hut. Previously it was owned by PepsiCo. 

Sharing a parent company with Taco Bell and Pizza Hut means that KFC franchise owners have the opportunity to open multi-brand locations—i.e. to have KFC, Taco Bell, and/or Pizza Hut restaurants under one roof.

How Much Does a KFC Franchise Cost?

One of the first questions you probably want answered is “how much does it cost to open a KFC franchise?” There are a few different costs you need to be aware of. The first is the franchise fee. KFC’s franchise fee is $45,000. To be completely frank, this franchise fee is on the higher end of food franchise opportunities. It’s definitely possible to find fast food franchises with much lower franchise fees, but KFC’s is in line with some of the bigger names in the quick-service space:

  • McDonald’s: $45,000
  • Taco Bell: $45,000
  • Wendy’s: $40,000
  • Popeyes: $50,000

In addition to the initial franchise fee, you can expect to pay the following one-time fees: application fees, transfer fees, and training expenses. You’ll also need capital for the cost of acquiring a location, obtaining inventory, and opening expenses. 

All told, KFC franchise startup costs are estimated to be between $1.3 million and $2.6 million, depending on location and other variable factors.

In terms of ongoing fees, you can expect to pay 5% of gross revenue as a royalty fee and 5% of gross revenue for advertising. Additional fees will be listed in the franchise disclosure document (more on this later).

KFC Franchise Requirements 

On their website, KFC states that in order to be accepted as a franchisee, you must have a minimum net worth of $1.5 million, half of which must be liquid (defined as cash or an asset that can be converted to cash in 10 business days). Additionally, you’ll need a personal credit score of at least 700 and cannot have a history of bankruptcy. 

Beyond the financial requirements, applicants cannot have a criminal record or a history of litigation.

How to Open a KFC Franchise

Still interested in opening a KFC franchise location? Here’s how to proceed in four steps.

Step 1: Submit an Online Application

The first step in applying to become a KFC franchisee is filling out an interest form on the corporation’s website. The short form goes over questions like net worth, previous experience, whether you’re interested in opening a new location or acquiring an existing one (or both), whether you have business partners, and whether you have access to a line of credit.

There are a handful of factors that will likely give you an edge over the competition in terms of having your application accepted. Most notable is having prior experience in running a restaurant or other type of hospitality business. 

Step 2: Prepare for the Interview

Next, you’ll wait for the KFC Corporation to contact you after receiving your application. Assuming you make it past the initial screening process, you can expect an intensive interview process, including a background check.

You should be prepared to talk about and provide proof of your career or business history, as well as to provide references and referrals. Beyond meeting the financial requirements that we discussed earlier, you’ll want to stand out as having an entrepreneurial mindset, being a great leader and coach, and knowing how to provide excellent customer service.

Step 3: Obtain the Franchise Disclosure Document and Other Paperwork

This next step is an important one. If all is proceeding well with your application, you’ll begin to receive paperwork, including a franchise agreement and a franchise disclosure document (FDD).

It’s crucial that you look over both of these documents carefully and make sure you fully understand the fine print before you sign anything. You should also have a lawyer review the agreement and the FDD.

This is also a good time to connect with current KFC franchise owners so you can hear their firsthand account of what running a KFC location is really like. You can either find current owners on your own, perhaps in your area or network, or you can ask your contacts at the KFC Corporation to connect you with a few people.

Remember this is a two-way street: You’re putting your best foot forward so that you’ll be approved as a franchisee but it’s also important that you’re confident that this is the right move for you.

Step 4: Complete the Training Process

Once you’ve passed your interview and reviewed all the necessary paperwork (a process which the corporate website estimates to take between two and three months), you’re more than halfway through the process of opening a KFC franchise. Next up, you, your manager, and select employees are required to undergo a seven-week training program.

The program is structured as follows: The first week is reserved for orientation and onboarding. The next two weeks are for online training, and the final four weeks will take place at a restaurant location, allowing you to obtain more hands-on experience. 

The good news is that such an extensive program will help set you and your staff up for success. The bad news? You’ll be required to foot the associated travel and lodging costs.

Obtaining Financing for a KFC Franchise

As we’ve discussed throughout this article, you will need significant capital in order to open a KFC restaurant. You might decide to seek business financing to cover some of the hefty upfront costs. You have several different options including SBA loans, traditional bank loans, and alternative funding. You can also consider equipment financing in order to purchase the equipment necessary for opening.

While it’s true that it’s more difficult for new businesses to secure financing, franchises are often viewed as lower risk, so you may not find it too challenging. However, you should be prepared with a well-written business plan to show potential lenders that you’ll be able to repay the debt.

Pros and Cons of Opening a KFC Franchise

As with opening any franchise, there are benefits and disadvantages. The biggest benefit of a franchise is that you won’t face all the struggles of starting a business from scratch with zero name recognition. On the flip side, the main drawback is likely that you won’t be completely independent—at the end of the day, you’ll still have a big corporation to answer to.

Let’s go over a few specific pros and cons of becoming a KFC franchise owner.

KFC Franchise Pros

  • The KFC brand is one of the best-known worldwide, which gives any new business a massive leg up. 
  • All KFC locations have territory protection of 1.5 miles or 30,000 people, whichever is smaller. Not all franchises offer this perk. 
  • Ability to open multiple offerings under one roof with sister brands Taco Bell or Pizza Hut.
  • Ability to open a new location, as well as acquire existing locations.
  • Solid support provided in the form of a seven-week training program.

KFC Franchise Cons

Top KFC Franchise Alternatives 

If you’re not convinced that opening a KFC franchise is the right decision for you, here are a few other options to consider. 

Chick-fil-A

Chosen as America’s favorite restaurant chain for six years in a row, Chick-fil-A is a solid alternative to a KFC franchise.[2] If you’re strapped for cash, this might be a particularly good option for you as Chick-fil-A’s franchise fee is just $10,000—considerably lower than most of their competitors. 

Of course, there are also drawbacks. A couple big ones: The company has faced boycotts and negative press due to the nature of its charitable giving.[3] Furthermore, their setup for franchisees is such that they retain ownership of all real estate and equipment, so you won’t own any equity and therefore cannot sell or pass the restaurant down upon retirement. 

One factor that could go either way is the stipulation that Chick-fil-A restaurants cannot open for business on Sundays. This could ultimately eat away at your bottom line, but it could also mean you have a better work-life balance.

Read more in our full guide to opening a Chick-fil-A franchise.

Wingstop

If you’re sold on a chicken-focused restaurant but aren’t sure if you want to open a KFC franchise, you might want to consider if Wingstop is an option for you. Like KFC, Wingstop has franchise locations around the world. Unlike KFC, you can’t open a single Wingstop location—you must commit to a minimum of three Wingstop locations.

Wingstop’s initial franchise fee is $20,000 per store and their development fee is $10,000. (Remember that you’ll have to multiply those numbers by three to get the minimum Wingstop requirement.) Wingstop’s royalty fee is 6% of gross sales, the marketing fee is 4%, and the local advertising and promotional fee is 1%.

Read more in our complete guide to opening a Wingstop franchise.

Domino’s

As we’ve established, opening a KFC franchise requires a significant financial commitment. If you are not comfortable with that (or if you simply can’t afford it), a Domino’s franchise could be a good alternative for you. 

The minimum net worth requirement to become a Domino’s franchisee is $250,000 (compared to $1.5 million for KFC), and you’ll need to have $75,000 in liquid assets (one-tenth of the KFC requirement). Domino’s ongoing royalty fee is 5.5% and the marketing and advertising fee is 4%.

Read more in our guide to opening a Domino’s franchise.

The Bottom Line

As you’ve learned throughout the course of this article, opening a franchise is a big undertaking. One that you should only enter into after having figured out a path to financing, taken the time to fully understand any contracts or paperwork you’re signing (with the help of a business attorney), and carefully weighed the pros and cons.

That said, franchising is the perfect fit for many entrepreneurially minded individuals who prefer some existing structure to their new business venture. If that sounds like you, and you’re a big fan of the “finger lickin’ good” brand, starting a KFC franchise could be the right next step for you.

Article Sources:

  1. KFC.com. “Be Your Own Colonel.”
  2. Forbes.com. “Chick-fil-A Named America’s Favorite Restaurant Chain for the Sixth Straight Year.”
  3. Vox.com. “Chick-fil-A’s Many Controversies, Explained.”

Sally Lauckner

Sally Lauckner is the editor-in-chief of JustBusiness and the editorial director at Fundera.

Sally joined Fundera in 2018 and has almost 15 years of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There, she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at AOL.com, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, Cosmopolitan, and ColoradoBiz magazines, as well as Yelp, SmallBizClub, and BizCrat.

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