KFC Traditional Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$1,052,825 - $3,771,550
Franchise Fee
$45,000
Total US Locations
3,638
Business Summary
KFC operates dine-in and carryout fast-food restaurants that prepare and sell chicken and other menu items approved by KFCLLC.
Corporate History
KFC US, LLC was formed as a Delaware limited liability company on March 31, 2016, taking over as the sole franchisor of KFC outlets in the United States from its predecessor, KFC Corporation (KFCC). KFCC, incorporated in 1971, had offered KFC franchises since 1971. The original Kentucky Fried Chicken Corporation began offering franchises in 1952. KFCC also previously franchised other restaurant concepts like H. Salt Fish, Zantigo, Pewter Pot Muffin House, and Kentucky Roast Beef. KFC US, LLC is ultimately owned by Yum! Brands, Inc., which provides some consolidated services. Since its formation, KFC US, LLC has also offered franchises for non-traditional KFC outlets, including "KFC Express" from 2016 to 2019.
Financial Overview
Investment Range
$1,052,825 - $3,771,550
Franchise Fee (Low)
$45,000
Franchise Fee (High)
$45,000
Royalty %
5%
Marketing %
4.5%
Equipment Costs (Low)
$575,000
Equipment Costs (High)
$2,506,000
Working Capital
$62,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
KFC has strong financial health, with its net worth reported as $49.2 million as of December 30, 2024, which is well above the $15 million minimum required to qualify for large franchisor exemptions under state and federal franchise registration laws. The company's fiscal year 2024 included an extra week, which added $2.9 million to total revenues and net income. Amounts due from Yum! Brands, Inc. and to members are net settled with noncash distributions of KFC's excess earnings.
Financing Details
KFC US, LLC does not offer direct financing for the initial investment or ongoing operations. However, KFC US, LLC's parent company, Yum! Brands, Inc. ("Yum"), has an arrangement with a third-party lender, LS BDC Adviser, LLC, to provide financing to qualified franchisee applicants, particularly those who are low-to-moderate income individuals in underserved American communities. KFC US, LLC refers candidates to this lender. Yum may, but is not obligated to, offer credit support in the form of limited guaranties, covering up to 33% of the original loan principal or commitment amount, with a maximum guaranty of $5,000,000. If Yum provides a guaranty, the franchisee, lender, and Yum enter into a letter agreement. This financing can cover acquisition, refinancing, and related costs for a franchised outlet. Neither Yum, KFC US, LLC, nor its affiliates receive any fees from the lender for these loans. Franchisees are responsible for negotiating loan terms with the lender. Key conditions of this financing include the franchisee notifying Yum within three days if the loan is more than 30 days past due, Yum having the right to buy out a defaulted loan, and the franchisee reimbursing Yum for any payments made under the guaranty. A default under the loan or letter agreement may result in the termination of the Franchise Agreement and Development Agreement. Yum may also provide similar lending assistance with other lenders.
Performance Metrics
Total US Locations
3,638
Franchised Units
3,558
Corporate Units
80
Avg Square Footage
2,350
Franchising Since
1952
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
1
Litigation Summary
KFC has one litigation case to disclose, involving a current franchisee, Chicken Shack Potsdam, LLC (CSP). CSP filed a complaint against KFC US, LLC on June 29, 2023, alleging breach of contract, breach of implied covenant of good faith and fair dealing, bad faith, estoppel, unjust enrichment, fraud, and fraudulent nondisclosure. CSP claims that KFC used a flawed impact study to allow another franchisee to open an outlet too close to CSP's, which allegedly depressed CSP's sales. On March 10, 2025, the court granted KFCLLC's motion to dismiss all of CSP's claims, but CSP has 30 days to file an amended complaint.
Bankruptcy History
KFC has no bankruptcy history to disclose.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, KFC franchisees must meet several conditions. They must be current in all financial obligations to KFC US, LLC and its affiliates, and must not have any unremedied breaches or a history of chronic repeated breaches within the 24 months prior to renewal. Franchisees are required to make capital expenditures to renovate and modernize the outlet and its signs and equipment to meet current KFC image standards. If renovation is not feasible, the franchisee may be required to relocate the outlet. A renewal fee of $2,000 (adjusted for the Consumer Price Index) must be paid. Finally, franchisees may be asked to sign a new license agreement with terms and conditions that could be materially different from their original contract, though certain core provisions like royalty fees, advertising contributions, renewal and assignment provisions, and protected territory terms will not change.
Training & Support Program
Franchisor Assistance
KFC US, LLC provides extensive assistance to its franchisees both before and during the operation of an outlet. Before opening, KFC helps franchisees by furnishing a description of the area where they may establish an outlet, approving proposed sites and plot plans, and providing standards and specifications for building, furnishings, and equipment. KFC also countersigns the Franchise Agreement once obligations under the Option Agreement are met, provides online access to an approved supplier list and its Standards Library, and offers initial training and operating advice. For ongoing operations, KFC US, LLC offers continuing training programs and services aimed at enhancing the KFC System and protecting its trademarks. This includes refining products and equipment, sharing quality control methods and R&D findings, recommending business and accounting procedures, and organizing meetings to discuss processing and marketing developments. Additionally, KFC works to ensure supply sources for essential trade secret items, notifies franchisees about the introduction of new optional and required products, informs them of Franchise Agreement expiration dates, and processes approval or disapproval of advertising materials within five business days.
Initial Training Hours
52
Training Location
Louisville RSC or virtual, or KFC Training Restaurant.
Ongoing Support
KFC US, LLC provides continuous support to its franchisees through various channels. This includes offering ongoing training programs and seminars as deemed appropriate, which may involve the mandatory web-based Learning Management System for restaurant employees, and refresher courses. KFC also provides continuing services to advance the KFC System and protect its trademarks, such as refining products and equipment, sharing quality control methods and R&D findings, recommending business and accounting procedures, and organizing meetings on processing and marketing developments. Additionally, KFC works to ensure supply sources for essential trade secret items, notifies franchisees about new optional or required products, informs them of Franchise Agreement expiration dates, and processes approval or disapproval of advertising materials within five business days.
Franchise Requirements
Ideal Candidate Profile
KFC US, LLC is seeking franchisees who have multi-unit operational experience and are committed to developing and operating multiple KFC outlets. Ideal candidates should meet KFCLLC's multi-unit operator criteria, demonstrating a strong commitment and ability to support the growth and development of the KFC system. This includes having the necessary financial and business capacity to promote growth, a proven track record of growth and development within KFC or another quick-service system, and a willingness to commit to opening 3 to 12 new outlets under a development agreement.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
KFC US, LLC franchisees receive a protected territory defined as the smaller of either a 1.5-mile radius around the outlet, or an area where 30,000 people reside. In metropolitan areas with more than 100,000 people, the territory is defined as an area where 30,000 people reside or work.
Staffing Notes
KFC US, LLC requires franchisees to hire all managers and employees for their outlet and ensure they comply with all applicable laws. The franchisee is also responsible for ensuring that all employees at the outlet complete the training required by KFC US, LLC for their specific roles before the outlet opens. A designated Key Operator, who completes specialized training, is responsible for training other employees using eLearning and on-the-job methods.