KFC Non-Traditional Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$302,825 - $1,434,000
Total US Locations
29
Business Summary
KFC operates non-traditional fast-food restaurants that prepare and sell chicken and other approved menu items. These KFC outlets are typically located in captive environments such as military bases, airports, universities, malls, high-traffic areas, amusement parks, and athletic stadiums, offering a limited menu compared to traditional KFC restaurants.
Corporate History
KFC US, LLC (KFCLLC), a Delaware limited liability company, was formed on March 31, 2016, and operates under the trade names "KFC" and "Kentucky Fried Chicken." KFCLLC began offering licenses for Non-Traditional Outlets and Traditional Outlets in June 2016. Its predecessor, KFC Corporation (KFCC), which was incorporated in 1971, offered and sold franchises for Traditional Outlets from 1971 until May 2016. KFCC also offered franchises for Non-Traditional Outlets (identified under the "KFC Express" logo) from 1992 to May 2016. In May 2016, KFCLLC took over as the sole franchisor or licensor of Outlets in the United States. KFCC continues to provide support services to the KFC system and, as of December 30, 2024, operated 80 Traditional Outlets. KFCLLC's ultimate corporate parent is Yum! Brands, Inc., a North Carolina corporation incorporated in 1997.
Financial Overview
Investment Range
$302,825 - $1,434,000
Franchise Fee (High)
$22,500
Royalty %
9.5%
Equipment Costs (Low)
$175,000
Equipment Costs (High)
$1,256,000
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
KFC US, LLC appears to be in strong financial health. As of December 30, 2024, KFC US, LLC reported a net worth of $49.2 million, which significantly exceeds the $15 million minimum required to qualify for certain state and U.S. franchise registration law exemptions. The company has also demonstrated financial stability by returning initial capital contributions to its parent company in prior years. It is noted that KFC US, LLC's ongoing general and administrative costs are handled by its parent, KFC Corporation, and therefore, these costs are not reflected in KFC US, LLC's financial statements.
Financing Details
KFC US, LLC does not directly offer financing for the initial investment or ongoing operations. However, its ultimate corporate parent, Yum! Brands, Inc., has an arrangement with a third-party lender, LS BDC Adviser, LLC. This lender may provide financing to qualified licensee applicants, particularly low-to-moderate income individuals in underserved communities. As an incentive for the lender to extend credit, Yum! Brands, Inc. may provide limited loan guarantees, covering up to 33% of the loan's original principal or commitment amount, with a maximum guarantee of $5,000,000. Licensees would directly negotiate loan terms, including interest rates and repayment schedules, with this third-party lender. Neither KFC US, LLC nor Yum! Brands, Inc. receives any fees or consideration from the lender for these loans. Yum! Brands, Inc. also reserves the right, but is not obligated, to provide similar lending assistance for loans obtained from other lenders. Should a licensee's loan default, Yum! Brands, Inc. has the right, but not the obligation, to purchase the outstanding loan balance plus accrued interest and fees.
Performance Metrics
Total US Locations
29
Franchised Units
29
Corporate Units
0
Franchising Since
2016
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
KFC US, LLC is currently involved in one legal case. A current franchisee, Chicken Shack Potsdam, LLC, filed a lawsuit against KFC US, LLC on June 29, 2023. The franchisee alleged various claims, including breach of contract, fraud, and bad faith, asserting that KFC US, LLC's reliance on a flawed impact study led to a new outlet opening too close to their existing location, negatively impacting their sales. On March 10, 2025, the court dismissed all of Chicken Shack Potsdam, LLC's claims, but the franchisee has been granted 30 days to file an amended complaint, meaning the case remains active.
Bankruptcy History
KFC US, LLC has no bankruptcy history to report according to its disclosure document.
Agreement Terms
Initial Term
10 years
Renewal Conditions
KFC US, LLC does not grant franchisees the right to renew or extend their Non-Traditional License Agreement.
Training & Support Program
Franchisor Assistance
KFC US, LLC provides extensive assistance to its Non-Traditional Outlet licensees. Before opening, KFC US, LLC furnishes a description of the area where the outlet may be established and provides standards and specifications for building type, furnishings, and equipment. KFC US, LLC reviews and approves proposed site and plot plans and offers initial training and operating advice. Licensees also gain access to KFC US, LLC's confidential Standards Library. During ongoing operations, KFC US, LLC notifies licensees of required products or product approval withdrawals and approves advertising materials and transfers. KFC US, LLC also provides services related to Restaurant Technology, including developing, upgrading, maintaining, and supporting required technology platforms, hardware, and software components, as well as help desk and data management services.
Initial Training Hours
252
Training Location
Louisville, KY (for orientation) or virtual, and at KFC Training Restaurant Locations (to be determined) or existing Non-Traditional Outlets for hands-on training.
Ongoing Support
KFC US, LLC provides various forms of ongoing support to its Non-Traditional Outlet licensees. This includes notifications regarding required products or changes in product approvals, and approval of advertising materials and transfers. Licensees pay a monthly fee for the ongoing subscription, maintenance, and support of the required Restaurant Technology, including software and related services. An estimated annual cost for computer system maintenance, updates, and support is also required. KFC US, LLC provides access to its confidential Standards Library and a web-based Learning Management System for online courses related to job role training and new products. Licensees and their employees may also be required to attend additional and ongoing refresher training courses and seminars. KFC US, LLC approves all advertising materials not provided by them or the National Co-Op.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Absentee Allowed
Territory Type
Non-Exclusive
Territory Size Requirements
KFC Non-Traditional Outlet franchisees will not receive an exclusive territory. KFCLLC may operate or grant others the right to operate other Outlets, or sell KFC products and use the Marks, anywhere, including near the Non-Traditional Outlet, or through other channels of distribution like the Internet. Franchisees will not receive compensation if KFCLLC or others solicit orders near their Non-Traditional Outlet.
Staffing Notes
KFC US, LLC requires licensees to have a manager and at least one additional employee at the Non-Traditional Outlet who have successfully completed all designated training. This manager must devote full-time attention to the operation of the outlet. Licensees are responsible for hiring all their employees and ensuring they complete required training for their roles before the outlet opens. KFC US, LLC also provides a Learning Management System for online training of restaurant employees, and may require employees to attend additional refresher courses.