Bottom line
- Total investment $1.1M – $3.8M including a $45K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $1.3M/year (median $1.3M).
- Rated STRONG with a risk score of 40/100. SBA loan default rate of 0.0% across 57 loans (below the industry average).
- System contracting at -7.4% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one KFC unit return on the cash you put in?
Unlevered ROIC · per unit
8%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 KFC units return on equity?
Equity IRR · 5-yr
49.2%
7.41× MOIC
Year-1 DSCR
1.89×
EBITDA ÷ debt service
Equity required
$2.1M
on $10.1M purchase
Total debt
$8.0M
SBA $5.0M + senior + seller note
Overview
About
KFC franchisees operate quick-service chicken restaurants, managing daily operations including food preparation using KFC's proprietary recipes, staff scheduling, customer service, inventory management, and marketing within their protected territory. Franchisees handle P&L responsibility while adhering to brand standards, technology systems, and paying 4-5% royalties on gross revenue to corporate.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 17 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
KFC presents moderate-to-cautious risk with a contracting franchise system, opaque profitability data, and franchisor litigation over territorial protection—making unit economics unclear for prospective franchisees.
Score breakdown · what drove the 40 / 100 rating
- 01MINORUnit count declining 4.2% YoY indicating system contraction and potential market saturation
- 02MINORNo Item 19 (Average Unit Volume) disclosure prevents assessment of actual profitability relative to $1M-$3.7M investment
- 03HIGHRecent litigation (Chicken Shack Potsdam case) highlights franchisor's aggressive territory encroachment practices and willingness to open competing outlets despite protected territory claims
- 04MEDHigh initial investment ($1.05M-$3.77M) combined with undisclosed net income creates significant capital-at-risk with unclear ROI
- 05MINOR20-year term is lengthy with 4-5% royalties on declining unit count suggesting mature/saturated market
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
25 numbers
One-time purchase · CSV download · Validation questions included
FDD download
KFC · FDD (2025) PDF