KFC Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
KFC is a quick-service chicken chain built on its Original Recipe fried chicken, sandwiches, and sides. Franchisees operate restaurants within protected territories, running food prep, staffing, and P&L under KFC's brand standards.
FranchiseVerdict summary · 2026
A KFC franchise requires a total initial investment of $1.9M – $3.8M, including a $45K franchise fee and an ongoing 4.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.3M[2]. SBA 7(a) loans show a 12.3% charge-off rate across 281 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $1.9M – $3.8M
- 99th pct Service Resta…
- Avg gross sales
- $1.3M
- Net sales23rd pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 3,638
- 96th pct Service Resta…
- SBA charge-off
- 12.3%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $1.9M – $3.8M including a $45K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.3M/year (median $1.3M).
- RISKVerdict B (Above average), verdict score 51/100 (higher is better). SBA loan charge-off rate of 12.3% across 281 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- DECLINESystem 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
Corporate structure & franchisor financials
- Legal entity
- KFC US, LLC
- Parent company
- KFC Corporation (KFCC); ultimate parent Yum! Brands, Inc.
- Ultimate parent
- Yum! Brands, Inc.
- Predecessor
- KFC Corporation (KFCC); Kentucky Fried Chicken Corporation
- Prior franchisor entity
- CEO title
- President
- Catherine Tan-Gillespie
- Incorporated in
- DE
- HQ
- 1900 Colonel Sanders Lane, Louisville, KY 40213
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $228.7M
- vs $232.3M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
- CEO
- Catherine Tan-Gillespie
- Headquarters
- KY
- Founded
- 1952
- FDD year
- 2025
- States available
- 49
Can you afford it, and what does the money buy?
Entry cost runs 327% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown16 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Development Fee | $135K | $540K | |
| Additional Funds - 3 months (Development Agreement) | — | — | |
| Background Check Fee | $575 | $3K | |
| Deposit Fee | $20K | $20K | |
| Option Fee | $25K | $25K | |
| Training Expenses | $5K | $8K | |
| Permits, Licenses & Security Deposits | $50K | $100K | |
| Real Property | $300K | $1.0M | |
| Building & Site Costs (new construction) | $1.0M | $1.9M | |
| Building & Site Costs (remodel/conversion) | $200K | $650K | |
| Equipment, Signage, Decor, POS & Required Technology | $375K | $606K | |
| Start-up Inventory | $10K | $10K | |
| Grand Opening Expense | $5K | $5K | |
| Insurance | $7K | $10K | |
| Miscellaneous Costs | $5K | $10K | |
| Additional Funds (3 months) | $50K | $75K | |
| Total initial investment | $2.2M | $5.0M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.9M – $3.8M
- Bottom third — review vs category
- Liquid capital req'd
- $50K – $75K
- Bottom third — review vs category
- Franchise fee
- $45K – $45K
- Bottom third — review vs category
- Royalty
- 4.0%
- formula · typical 6–8%
- Ad fund
- 4.5%
- typical 3–5%
- Total fee load
- 8.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of gross sales |
| Marketing / ad fund | 4.5% of gross sales |
| Technology fee | $297 |
| Training fee | $3K |
| Transfer fee | $10K |
| Renewal fee | $10K |
| Inventory (initial) | $10K – $10K |
| Total fee load | 8.5% of rev |
What do units actually make?
Average unit sales run 11% above the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$182K
13.5% margin
Unlevered ROIC
6%
EBITDA / total invested capital
Payback
15.8 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one KFC unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
6%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 KFC units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.8M
on $8.8M purchase
Total debt
$7.0M
SBA $4.4M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.3M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Net Sales (average and median), All Outlets and segmented subsets
- Sample size
- 2,850 outlets
- vs category median 20 · large
- Range (low → high)
- $439K→$3.5M
- Cohort dispersion (min → max)
- Transparency tier
- none
- Categorical assessment of disclosure depth
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 7 / 10
- vs category median 4 / 10 · above
Compared against 782 Quick-Service Restaurants brands
Revenue is only 0.5x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.3M/year in gross sales. Revenue-to-investment ratio: 0.5x.
Fee burden
Total ongoing fee load of 8.5% (near the Quick-Service Restaurants average).
Disclosure
Transparency score 7/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -7.4% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Multi-unit rate
Only 6% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How KFC Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 3,638
- Opened
- 28
- Last reporting year
- Closed
- 0
- Terminated
- 151
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 4.2%
- Company-owned
- 80
- Corporate units in the system
- % franchised
- 98%
- vs corporate-owned
- Multi-unit owners
- 5.9%
- Net growth (3-yr)
- -7.4%
- Net unit change over 3 years
- 3-yr CAGR
- -7.4%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 28
- Closed (3yr)
- 0
- Terminated (3yr)
- 151
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 168
- Reacquired (3yr)
- 34
- Franchisor bought back
- Transfer rate
- 4.6%
- Owners selling to other franchisees
- Continuity rate
- 95.1%
- Units that stayed open
- Termination rate
- 4.1%
- Franchisor-initiated terminations
- Ceased ops
- 0.1%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 6 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 281
- Loan volume
- $181.3M
- Median loan
- $700K
- 50th percentile
- Charge-off rate
- 12.3%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 87.7%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 94
- Defaults
- 26
- Typical loan rate
- 5.9%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- brand above franchise avg ↑
- Jobs supported
- 1,759
- 4.0 per loan
- Lender concentration
- 10%
- top lender's share
Borrower mix: 8% went to startups / new businesses, 92% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Vintage analysis
KFC charge-off rate by loan vintage
Top lenders financing KFC franchisees
Showing 3 of 94 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into KFC's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 12-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
What could kill this investment?
SBA loans charge off at 12.3% — 23% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Litigation (Item 3)
Chicken Shack Potsdam, LLC v. KFC US, LLC (NDNY, Case No. 8:23-cv-00789): franchisee alleged breach of contract, breach of implied covenant of good faith and fair dealing, bad faith, estoppel, unjust enrichment, fraud and fraudulent nondisclosure related to impact study and competing outlet placement. Court granted KFCLLC motion to dismiss in its entirety on March 10, 2025; franchisee had 30 days to file amended complaint.
Largest disclosed settlement: $22,500
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · KPMG LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 51 / 100 verdict
- 01MINORUnit count declining 4.2% YoY indicating system contraction and potential market saturation
- 02HIGHRecent litigation (Chicken Shack Potsdam case) highlights franchisor's aggressive territory encroachment practices and willingness to open competing outlets despite protected territory claims
- 03MINOR20-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
What are you signing up for?
Ongoing fees run about 8.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Territory population | 30,000 |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Arbitration location | Jefferson County, Kentucky |
| Jury trial waiver | Yes |
| Governing law | KY |
| Litigation count | 1 |
View Item 3 litigation summary
Chicken Shack Potsdam, LLC v. KFC US, LLC (NDNY, Case No. 8:23-cv-00789): franchisee alleged breach of contract, breach of implied covenant of good faith and fair dealing, bad faith, estoppel, unjust enrichment, fraud and fraudulent nondisclosure related to impact study and competing outlet placement. Court granted KFCLLC motion to dismiss in its entirety on March 10, 2025; franchisee had 30 days to file amended complaint.
Items 10, 11
Training & Operations
- Classroom training
- 12 hrs
- On-the-job training
- 240 hrs
- Training location
- Louisville RSC or virtual (classroom); KFC Training Restaurant, Location TBD (OJT)
- Ongoing training
- Required
- Site selection
- Franchisee selects, KFCLLC must approve
- Franchisor financing
- Offered
- Item 10
- POS system
- Approved Point of Sale (POS) System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Approved Point of Sale (POS) System
Item 20 · call current owners
Franchisee Contacts
7 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
KFC · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a KFC franchise?
The total investment to open a KFC franchise ranges from $1.9M – $3.8M, with an initial franchise fee of $45K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do KFC franchise owners earn?
According to Item 19 of the KFC FDD, the average gross sales per unit is $1.3M. The median is $1.3M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the KFC FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the KFC FDD and qualifies whose outlets they describe.
What is KFC's franchise failure rate?
Based on SBA 7(a) loan data, KFC has a charge-off rate of 12.3% across 281 loans, meaning 12.3% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many KFC franchise locations are there?
As of their most recent FDD filing, KFC has 3,638 total units in the United States, including 3,558 franchised units and 80 company-owned units. 28 new units were opened in the latest reporting year.
Is KFC a good franchise to buy?
FranchiseVerdict rates KFC as a B-grade franchise with a verdict score of 51 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.