KFC Franchise Cost, Revenue & Review 2026
- Investment
- $1.9M – $3.8M
- Disclosed sales
- $1.3M
- gross sales, not profit
- SBA charge-off
- 12.3%
- on 281 loans
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 →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $1.9M – $3.8M
- 99th pct Service Resta…
- Avg gross sales
- $1.3M
- Net sales26th 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 median · 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).
- GROWTHNegative: net -157 franchised outlets in the latest year (28 opened, 185 closed) (Item 20).
- 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.
- FDD Item 1, page 10 of the 2025 FDD
- 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
Same owner · FDD Item 1
4 other brands on this site name Yum! Brands, Inc. as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
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 479% above the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown13 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| 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 | $1.0M | $1.9M | |
| Equipment, Signage, Décor, 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 | $1.9M | $3.8M |
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%
- Set by a 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 38% above the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for KFC until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$2.9M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own 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?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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 19 · large
- Range (low → high)
- $439K→$3.5MCited, not corroborated — printed on page 54 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- 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 781 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 median).
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 medians
How KFC Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
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
- 185
- Terminated
- 151
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 5.1%
- 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
Last fiscal year · Item 20 exits and transfers
- Terminated
- 151
- Not renewed
- 0
- Transferred
- 168
- Reacquired
- 34
- Franchisor bought back
- Signed, not yet open
- 0
- 0.00 per open outlet · Item 20 Table 5
- Projected new
- 18
- Franchisor's next-year forecast
- 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.
Where the owners are · Item 20 owner list
7 current owners across 6 states.
- CA 2
- FL 1
- IA 1
- KY 1
- NM 1
- VA 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
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%
- on 281 loans · 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.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for KFC from SBA 7(a) FOIA data.
- Principal loss rate
- 1.0%
- Avg SBA guarantee
- 73%
- Avg interest rate
- 5.89%
- Avg chargeoff amount
- $429K
- Lender concentration
- 10.3%
- Job velocity
- 4.0 per $100K
- NAICS benchmark
- 8.7%
- NAICS 722513
- Jobs supported
- 1,759
Top SBA lendersTop lender holds 10% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | The State Bank and Trust Company | 4 | $2.6M | 0.0% |
| 2 | Celtic Bank Corporation | 3 | $2.5M | 0.0% |
| 3 | The Huntington National Bank | 3 | $5.3M | 0.0% |
| 4 | United Pacific Bank | 3 | $1.9M | 0.0% |
| 5 | TD Bank, National Association | 2 | $1.9M | 50.0% |
| 6 | SouthState Bank, National Association | 2 | $1.9M | 0.0% |
| 7 | Regions Bank | 1 | $4.1M | 0.0% |
| 8 | BankUnited, National Association | 1 | $980K | 0.0% |
| 9 | KeyBank National Association | 1 | $932K | N/A |
| 10 | First Savings Bank | 1 | $175K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| CACalifornia | 9 | 0 | 0.0% |
| TXTexas | 8 | 0 | 0.0% |
| OHOhio | 4 | 0 | 0.0% |
| MIMichigan | 3 | 0 | 0.0% |
| LALouisiana | 2 | 0 | 0.0% |
| AKAlaska | 1 | 0 | -- |
| CTConnecticut | 1 | 0 | 0.0% |
| FLFlorida | 1 | 0 | 0.0% |
| GAGeorgia | 1 | 0 | 0.0% |
| IAIowa | 1 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
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)
Subject: the franchisor is a named party (defendant).
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.
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
Litigation case detail1 matters · Item 3
Litigation cases
The franchisor
Pending (1)
Chicken Shack Potsdam, LLC v. KFC US, LLC
pendingBrought by a franchisee · filed 2023-06-29 · United States District Court, Northern District of New York · 8:23-cv-00789-TJM-CFH
“Chicken Shack Potsdam, LLC v. KFC US, LLC (United States District Court, Northern District of New York, Case No. 8:23-cv-00789-TJM-CFH) On June 29, 2023, Chicken Shack Potsdam, LLC (“CSP”), a current franchisee of KFCLLC, filed a complaint against KFCLLC alleging breach of contract, breach of the implied covenant of good faith and fair dealing, bad faith, estoppel, and unjust enrichment, and is”Page 15 of the 2025 FDD, Item 3
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
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 territory |
| 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
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. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns KFC?
KFC is franchised by KFC US, LLC. Its parent company is KFC Corporation (KFCC); ultimate parent Yum! Brands, Inc.. The ultimate parent named in the FDD is Yum! Brands, Inc.. Source: FDD Item 1, 2025 filing.
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). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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
Are you the franchisor?
If you represent KFC, you can request corrections or provide updated information.
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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.