Kentucky Fried Chicken, more commonly known as KFC, is one of the world’s largest fast food chicken chains. The company was founded by Colonel Harland Sanders in 1952 and has grown to over 20,000 locations worldwide. KFC is known for its signature fried chicken recipes and fast food offerings. For entrepreneurs interested in getting into the food franchise industry, a KFC franchise can be a lucrative business opportunity. However, the costs involved in opening and operating a KFC franchise are substantial. In this article, we’ll take a look at the key costs involved and how much you can expect to invest to open your own Kentucky Fried Chicken franchise location.
Initial Franchise Fee
To open a new KFC franchise location, you must first pay an initial franchise fee to the company. This covers the rights to use the company’s branding, trademarks, recipes, and operating system. The initial franchise fee to open a new KFC restaurant is $45,000 This must be paid upfront before you can proceed with opening your franchise location. It allows you access to KFC’s proven business model to help get your new restaurant up and running.
Real Estate and Construction
One of the largest upfront costs involved in opening a KFC franchise is purchasing or leasing appropriate real estate for your restaurant location. You’ll need a suitable building or land to construct a new building to KFC brand specifications. Real estate costs vary tremendously based on location. In general, you can expect to invest between $400,000 to $1.1 million just for the real estate purchase or lease for your KFC franchise.
Construction costs are also a significant expense, ranging from $534,000 to $930,000 This covers building costs to construct your restaurant facility or retrofit an existing building to meet KFC requirements It also includes costs like kitchen equipment, signage, decor, furniture, point of sale systems, and more.
Equipment and Initial Inventory
You’ll need commercial equipment for food preparation, storage, safety, etc. Equipment costs range from $329,000 to $476,000 for a new KFC franchise location. This covers all the necessary equipment from fryers to refrigerators to food prep and cooking equipment. You’ll also need an initial inventory of food supplies, packaging, and ingredients to get started. This is estimated at around $10,000.
Training and Opening Costs
KFC requires franchisees to complete 6 weeks of hands-on training at an existing KFC location, as well as 2 days of classroom-style training. Training costs range from $7,000 to $10,000 per person. You’ll also incur costs related to your grand opening marketing launch, estimated at around $5,000.
Franchise Fees
In addition to the initial franchise fee, you’ll have to pay ongoing franchise fees. This includes a monthly royalty fee of 4-5% of gross sales. KFC also charges a national advertising fee of 4.5% of gross sales. There are other miscellaneous fees for things like audits, additional training, etc. that can add to your ongoing costs.
Additional Expenses
Some other costs involved with a new KFC franchise include:
- Permits and licenses ($50,000 to $100,000)
- Insurance costs ($7,250 to $10,050)
- Professional fees for things like legal and accounting
- Miscellaneous costs like uniforms, supplies, etc. ($5,000 to $10,000)
- Additional operating funds ($50,000 to $75,000)
Total Investment
Taking all these costs into account, the total investment to open a new KFC franchise restaurant ranges from $1.44 million to $2.77 million. This makes it one of the more expensive food franchises to open, but the potential returns can be significant with the built-in demand for the KFC brand.
The majority of costs are incurred upfront to get your new restaurant constructed, equipped, stocked, and ready to open. You’ll also need sufficient operating capital to cover ongoing expenses like payroll, food costs, royalties, marketing, maintenance, etc. Access to financing is important, as the high total investment cost can be a barrier to entry for some franchisees.
Is a Kentucky Fried Chicken Franchise Profitable?
Given the high startup costs, a prospective KFC franchisee will want to understand the potential returns and profitability of owning a KFC franchise. The total investment of over $1 million may seem daunting, but the potential rewards of being part of a world-renowned brand like KFC can outweigh the costs.
KFC is consistently ranked as one of the top fast food chains in terms of average unit volumes, averaging $1.2 million to $2.6 million per location. Given the high unit volumes and KFC’s strong brand recognition, a new franchise can potentially deliver excellent returns on your investment. According to KFC, the average restaurant generates a cash-on-cash return of 25% or more.
Of course, profitability will depend on many factors like location, competition, local market demand, operations, and your ability to effectively manage your franchise. But the built-in demand for KFC’s signature fried chicken helps drive strong revenues. With good management, your KFC franchise investment can pay off handsomely.
Financing Your KFC Franchise
Very few franchisees can afford to self-finance the full $1.4 million to $2.7 million investment cost. That’s why financing is crucial when opening a new KFC franchise.
KFC does not offer direct financing, but they do maintain relationships with a network of lenders familiar with franchising. Many franchisees secure SBA loans, which are designed for small business owners and have favorable terms. With good credit and a sizable down payment (25-30% recommended), SBA loans can finance up to $5 million for eligible franchisees.
You may also consider equipment leasing, commercial mortgages, 401(k) business financing, home equity loans, credit cards, family loans, or partnerships to help fund your KFC franchise investment. Being well-capitalized and exploring all financing options is key to clearing the biggest hurdle – the high initial investment cost.
Is Opening a KFC Franchise Right for You?
Opening any franchise requires an immense commitment of time and money. Before diving in, carefully consider whether a KFC franchise aligns with your goals, skills, and financial situation. While rewarding, it requires solid business acumen and operational abilities to run a successful franchise location.
If you have prior multi-unit restaurant management experience, access to sufficient capital, a strong work ethic, and relentless drive to succeed, a Kentucky Fried Chicken franchise can be a very profitable business opportunity. The sunk costs are high, but the potential rewards of being part of KFC’s world-famous fried chicken brand may make it well worth the investment.
Kinds of KFC Franchise Types
KFC franchises fall under two categories: non-traditional and traditional. Non-traditional KFC outlets are smaller than traditional outlets and offer a limited menu. Express outlets primarily operate at locations defined as “captive” in nature, including venues such as military bases, transportation terminals, colleges and universities, venues within business and industry locations, malls, high foot traffic locations, amusement parks, athletic stadiums and similar sites. Traditional KFC outlets encompass all other KFC locations, offer a full menu, and are primarily freestanding.
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How Much is the KFC Franchise Fee?
The franchise fee for KFC is dependent on which type of franchise the franchisee decides to open. In the case of non-traditional KFC outlets, the franchise fee (referred to by the franchisor as the initial license fee) is dependent on term length. For non-traditional KFC outlets, KFC charges an initial license fee of $22,500. For traditional KFC franchise agreements, the franchise (or initial license) fee is $45,000 split into the deposit fee and the option fee.
The franchise fee is basically a cover charge for entry into a franchise system, and for taking advantage of the expertise the franchisor has acquired. It typically covers the right to use the franchisor’s system (including trademarks and operating system), and services the franchisor provides to franchisees like help finding a location, training materials, etc.
How Much does a KFC Franchise Cost and Make?
FAQ
How much does a KFC franchise owner make?
How much does it cost to open a Kentucky Fried Chicken?
The franchise fee to become a KFC franchise owner is $45,000, with an estimated startup costs totals ranging between $1.2 million and $2.5 million.
Is KFC a good investment?
KFC’s parent, Yum! Brands, has been a good investment over the years. As of mid-2025, it delivered a 10.7% average annual total return over the past decade.Jun 5, 2025
How much does a fried chicken franchise cost?
The estimated startup costs to become a KFC franchise owner range between $1.2 million and $2.5 million. This includes the franchise fee of $45,000 and a 5% royalty fee on gross monthly receipts paid to the company.
How much does it cost to buy a KFC franchise?
To buy a KFC Kentucky Fried Chicken franchise, you’ll need to have at least $360,000 in liquid capital. The total investment ranges from $1,000,000 to $2,000,000. They also offer a discount for veterans.
How many KFC Kentucky Fried Chicken stores are there?
As of the beginning of 2021, there are above 25,000 KFC Kentucky fried chicken stores in 145 countries and territories around the globe. The vast majority of these are located in the United States, where the chain originated. The first KFC franchise opened in 1952, and the company rapidly expanded across the country in the following years.
Can you open a KFC franchise?
KFC franchise is a great way to enter a restaurant and fast food industry with a lot of help from the franchisor. Read extra information on the franchise and its cost below, and submit an application if you are interested. How to open a Kentucky Fried Chicken franchise? Ensure you have adequate capitalization.
Is KFC a good franchise?
In the U.S. alone, KFC has a strong footprint with thousands of outlets, making it a household name and a staple in the quick-service restaurant industry. KFC provides robust support to its franchisees, ensuring they have the tools and knowledge needed for success.
How much do KFC franchise owners make?
Although the exact salaries of KFC franchise owners are kept private by Yum! Brands, it is estimated that they take home around $120,000 per year. This is grounded on the average salaries of food franchise owners. Individual KFC units produce revenues between $942,000 and $1,000,000 per year.