KFCFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A KFC franchise requires a total initial investment of $1.1M – $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]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $1.1M – $3.8M
- 96th pct Service Resta…
- Avg gross sales
- $1.3M
- 44th pct Service Resta…
- Royalty
- 4.0%
- 3rd pct Service Resta…
- Units
- 3,638
- 98th pct Service Resta…
- SBA default
- 12.3%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
At 0.6x revenue per dollar invested, this system underperforms the typical 1.5-2.5x range.
Franchising since 1952. Systems this mature have refined operations and brand recognition.
Large franchise systems benefit from brand recognition, supply chain leverage, and proven operations.
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).
- Verdict A (Top Quintile) with a risk score of 32/100. SBA loan charge-off rate of 12.3% across 281 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 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
- Legal entity
- KFC US, LLC
- Parent company
- Yum! Brands, Inc.
- CEO title
- President
- Catherine Tan-Gillespie
- Incorporated in
- DE
- HQ
- 1900 Colonel Sanders Lane, Louisville, Kentucky 40213
- Auditor
- KPMG LLP
- Audited financials
- Franchisor revenue
- $232.3M
- vs $228.7M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
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.
- CEO
- Catherine Tan-Gillespie
- Headquarters
- KY
- Founded
- 1952
- FDD year
- 2025
- States available
- 49
FDD Item 7 · 2025 filing · 16 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.
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
7%
EBITDA / total invested capital
Payback
13.6 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $1.1M – $3.8M
- Below avg, review vs category
- Liquid capital req'd
- $50K – $75K
- Below avg, review vs category
- Franchise fee
- $45K – $45K
- Below avg, review vs category
- Royalty
- 4.0%
- Gross Revenue · 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) | $12K – $15K |
| Total fee load | 8.5% of rev |
Financial Performance
- Avg gross sales
- $1.3M
- Per unit, per year
- Median gross sales
- $1.3M
- Item 19 type
- net_sales
- Sample size
- 2881 units
- vs category median 28 · 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
- Transparency
- 7 / 5
- vs category median 4 / 5 · above
Compared against 453 Quick-Service Restaurants brands
Revenue is only 0.6x the investment. This means each unit may take 5+ years to recoup the initial outlay at typical margins.
vs Quick-Service Restaurants averages
How KFC Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 3,638
- Opened
- 28
- Last reporting year
- Closed
- 151
- Terminated
- 151
- Franchisor ended the franchise (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 (yr3)
- -4.2%
- Net unit change last year
- 3-yr CAGR
- -7.4%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 2
- Transfers (3yr)
- 168
- 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 · 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 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)
- 96.8%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 94
- Defaults
- 26
Vintage analysis
KFC charge-off rate by loan vintage
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.
Risk analysis
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.
Litigation (Item 3)
Chicken Shack Potsdam, LLC v. KFC US, LLC (NDNY, Case No. 8:23-cv-00789-TJM-CFH). Current franchisee filed complaint 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. Claims arose from alleged flawed impact study allowing nearby competitor outlet that depressed plaintiff's sales. KFCLLC's motion to dismiss granted in its entirety on March 10, 2025. Plaintiff has 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: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 32 / 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
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Radius/Population |
| Protected territory | Yes |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 1 year |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | Kentucky |
| Litigation count | 1 |
View Item 3 litigation summary
Chicken Shack Potsdam, LLC v. KFC US, LLC (NDNY, Case No. 8:23-cv-00789-TJM-CFH). Current franchisee filed complaint 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. Claims arose from alleged flawed impact study allowing nearby competitor outlet that depressed plaintiff's sales. KFCLLC's motion to dismiss granted in its entirety on March 10, 2025. Plaintiff has 30 days to file amended complaint.
Items 10, 11
Training & Operations
- Classroom training
- 12 hrs
- On-the-job training
- 240 hrs
- Training location
- On-site and corporate
- Ongoing training
- Required
- Site selection
- franchisor
- 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
25 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 $1.1M – $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 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 A-grade franchise with a risk score of 32 out of 100, 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.
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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.