KFC is one of the most popular fast-food chains in the United States, and the opportunity to start a franchise is something not many people skip as long as they are interested in the industry.
For those who don’t know (which we doubt), KFC stands for Kentucky Fried Chicken, and Harland Sanders founded it in 1930.
Although it started as a simple business with traditional fried chicken, today, KFC has a wide variety of chicken dishes, including the old but good friend one, but also grilled chicken, boneless wings, and sandwiches. And let’s not talk about fries and other side dishes.
In the focus of the business, KFC offers many franchise opportunities with varying costs attached to them depending on location size and type of restaurant you want to open since not all franchises are the same.
You have options even when the business will lie in pretty much the same goal and product/service. However, is KFC a franchise you can handle? Is it worth it in the place you’re located?
Before making a decision, give us a couple of minutes to share vital information.
Its History: How the Best Fried Chicken Was Born
We know some people may burn us for saying KFC is the best-fried chicken, but you kind of need to agree with us on this.
However, regardless of your preference, we are just here for something different: how it all started.
First, we need to learn about the great founder, Harland Sanders.
Harland Sanders was born in 1890 in Henryville, Indiana. His father died when he was just five years old, and his mother had to work in order to survive and provide enough food and resources to Sanders and his two siblings.
He cared for his siblings, and while she was away at work, he cooked meals for them. After a few years without any type of relationship, his mother ended up remarrying when he was 12.
However, unlike what you would expect, his stepfather was not happy with the idea of him having step-children, which led Sanders to leave his house not long after the marriage.
As a way to survive, he began to work on a farm and dropped out of seventh grade soon after algebra proved too difficult, also considering he didn’t have enough time due to his job.
Harland did his best to survive and be independent, which led him to work in several occupations and positions, including as a streetcar driver, insurance seller, railroad fireman, steamboat operator, tire seller, and even lawyer.
These are only some of the jobs he got and applied to, as there are many others he didn’t get or didn’t last for too long.
After a hard childhood and being alone for most of his teenage years, Sanders bought a roadside motel in Corbin, Kentucky.
He cooked for his customers to make extra money there while offering regular service. He served fried chicken and other recipes he had learned as a child.
His cooking soon became popular, and truckers, as well as travelers, were making a mandatory stop in the gas station to try Harland’s fried chicken.
He was so popular with his chicken that he removed all the gas pumps from the station and turned it into a fully-fledged restaurant later on.
According to all accounts, Sanders used to love the recipes that his mother taught him. Pan-fried chicken and country ham, fresh vegetables, homemade biscuits, to name a few.
But more importantly of all, he was apparently a skilled cook that brought a special touch to his recipe.
One of the secrets behind KFC and Sanders’ chicken is how he developed a pressure cooker method to speed up the cooking of his chicken. He was able to reduce the cooking time while still maintaining the high quality of the meal.
He was doing well and even got an endorsement in Duncan Hine’s Adventures in Good Eating in 1939.
Sanders had already perfected his “Original Recipe” of 11 herbs and spices during this year, and it continues to be a secret past down generation.
But How Was “The Colonel” Included in All This?
The name “KFC” wasn’t actually familiar in his initial restaurant. In fact, we still have a long road to get there.
However, the image of ‘The Colonel’ came to play a huge part when in 1950, Governor Lawrence Wetherby recommissioned Sanders as a Kentucky Colonel, and friends started calling him (as a joke) with the nickname.
This is when Harland also decided to play the character and started wearing the iconic white suit he used in public from there onwards.
Now, that’s quite an interesting story, but how did this business, “The Sanders Court & Café,” turn into a franchise?
By 1952, Sanders decided to franchise his recipe in order to expand his business to other states. He started with his friend Pete Harman in Utah, who was an operator in one of the largest restaurants in the city.
Although this was the first time he shared his recipe, the actual franchising started in about 1955 when the route for Interstate 75 was planned out. This route skipped Corbins as a place to stop and enjoy, which would make the restaurant lose lots of clients in the short and long term.
As a result, Sanders decided to sell the property and move to the cities in order to offer his product and recipe to other restaurant owners. He convinced many others of them over the next four years to include his Kentucky Fried Chicken on their menus.
With his hard work, the name “Kentucky Fried Chicken” and “KFC” came later with Don Anderson. This sign painter greatly contributed after investing in the business, including the slogan “It’s finger-lickin’ good.”
By this point, and after getting promotion of his recipe in other restaurants + commissions, he was making more money than with the restaurant itself.
By 1963, Sanders’s recipe had been franchised to over 600 outlets across the United States and Canada.
Sanders was a self-employed entrepreneur with 17 employees during this time, and as much as he liked his business, it was getting way too much to handle for himself.
Many people attempted to purchase KFC from Sanders, considering his success, but it wasn’t till 1964 when Harland Sanders sold KFC to a group of investors who paid $2 million (without inflation).
It was sold on the condition that quality would be maintained and that he would receive a lifetime income. He will also remain the company’s face in this agreement, and this, as we all know, has remained.
In 48 countries, there were 3,000 outlets by 1970. KFC was sold to Heublein in 1971 for $285 million. In 1980, Harland Sanders died due to pneumonia after being diagnosed with acute leukemia months prior. He was 90 years old.
At the time of Sanders’ death, KFC had 6000 outlets in 48 countries.
R.J. Reynolds, a tobacco giant, acquired Heublein in 1982. Later, he sold it to PepsiCo, which continued to grow, and in 1997, it spun off its restaurant chain, which included KFC and Taco Bell, into Tricon Global Restaurant Inc. The new company was rebranded as Yum! Brands in May 2002.
KFC offers a wide range of food to keep up with changing times. It has also introduced many vegetarian options to cater to a wider audience in countries like India. KFC also adapts its menu to suit the country in which it is located.
KFC currently has 22,600 outlets in 135 countries all over the globe with a brand worth of US $8.3B and sales of $27.9B as of 27 July 2020.
The company also experiments with plant-based meat and is looking for new technologies to increase its growth.
Too Expensive to Invest? – KFC Franchise Costs
Finally, reaching the part you’re interested in the most, we will be talking about how much you need to spend to start your own KFC franchise.
Warning: it isn’t cheap.
As you can expect with big franchises that are breaking sales every year, KFC doesn’t cost $20.000 nor anything close.
It is true that due to the size of the company and the time it’s been franchising (72 years now), it is a good idea to invest in it, but it is only as long as you’re willing to work in this industry and take your time.
Also, if you have the money.
Now, just like other franchises, KFC has its requirements that too many people don’t meet:
- Initial franchise fee: $45.000.
- Initial investment: this can range between $1.4 and $2.8 million depending on location, logistics, training, employees, type, etc.
- Net worth requirement: $1.5 million.
- Cash requirement: $750.000.
In addition, you have to handle the terms it comes with, which includes 5% in ad royalty fee, 4-5% in a general royalty fee, and a term of agreement of 20 years, which is renewable.
But the question here is: what does it offer in specific?
As you may know by now, franchises will help you to establish your business, open it, get trained along with your employees, and do everything. It is starting a business but without being alone and with other benefits.
In the case of KFC, extra benefits and options are offered, which vary depending on who is the franchisor:
- You get ongoing support for marketing, grand opening, proprietary software, franchisee intranet platform, site selection, security, meetings, co-ops, and more.
- Nine weeks of on-the-job training.
- 1.5 days for classroom training.
Pros & Cons: Is It Worth Your Time?
Besides taking the time to think about the company, franchise, industry, and world, you need to consider the business model you’re betting on.
You must have internalized that becoming a franchisee is amazing since you don’t have to do anything alone. However, at what cost?
Nothing is for free, and just like in everything else, franchising has its pros and cons. Additionally, you have the ones from the franchise itself.
So, when we start talking and analyzing options, it is important to cover every single aspect, from how you will handle the business model to what KFC (in this case) has to offer.
Therefore, take a closer look at the list we have for you and if you find any other, make sure to write it down:
Pros:
- It has been franchising for over 70 years, which makes it a reliable franchisor.
- KFC, overall, is an amazing company in the fast-food industry for whoever is interested in starting a restaurant.
- You don’t need to handle any step alone since finding your location, training employees, and all the process of getting started will be handled by KFC’s team.
- Training doesn’t take long, and you can even finish before the nine-week time mark.
- It is a worldwide brand and franchise, which allows you to open it from any place among the 130+ countries where it operates, or even in new ones if possible based on logistics.
- The franchise is expanding and remains strong despite COVID-19 issues and circumstances.
- It is almost guaranteed that you will succeed if you are located in the right place as KFC is a restaurant billions are always visiting and eating at.
- Although fried chicken is the main product, you get variety in the options available and offered to the public.
- Reputation, awareness, and everything you want from a franchise is offered here.
Cons:
- There’s no financing available.
- Like with every franchise, you need to handle royalties for the rest of your life.
- The business isn’t entirely yours as you need to follow the rules, terms and renew the contract every 20 years to continue operating.
- It is quite expensive as $1.5 million is the minimum you need to spend.
- There’s a digital fee of 3.5% of gross revenue collected from all digital orders.
- Absentee ownership is not available.
- Don’t bet on it if you’re thinking about a part-time business.
- You don’t get exclusive territories.
- You need to invest lots of time as a business owner but also a worker, even when you have employees.
Although the pros and cons are tied, we don’t want to scare you.
Franchises like KFC are more of a personal decision by the end of the day. Why? Because it is clear it isn’t bad. It’s just expensive and time-consuming. Also, you must like the industry you’re joining.
We recommend you evaluate your short and long-term goals and ask yourself: is this really the type of business you want?
Also, can you afford to spend this amount of money? You must keep in mind during this question that it takes about 4 to 6 months to get started with KFC as you need training, find employees, and so on. It’s a lot of work.
Thus, don’t expect to get everything done in about a month.
Although it depends on the size of the building and restaurant, you won’t get started in only a few days.
However, if you can bet on KFC, it can be a great revenue considering how quality has proven to be maintained throughout the years in over 90% of franchises.
Would We Invest in the Franchise?
It’s always possible to place a bet on businesses, whether if they are expensive or not. In the case of KFC, it is a good bet if you can spend the money.
The success rate is high due to how franchise owners have grown over the years and, well, it is KFC, after all. With the company growing, the same means for franchisees who are bringing plenty of profits.
However, here’s the thing: it isn’t only expensive but also takes lots of work.
We are not against working hard, but you must be into this industry to make the decision to invest in it. Otherwise, you will be wasting your time.
Instead of working on something that makes us exhausted and will continue like this, we prefer online alternatives that don’t require as much effort yet can still make us a lot of money.
There are many business models available, so it is important to research them all before you decide on a franchise or opportunity.
It is smart to try out online alternatives first before moving on to regular ones. It might be tempting to wonder what we recommend you do. It’s simple: lead generation.
You can generate leads from your own home with this digital business model. You don’t even require real estate or additional employees. This will allow you to save money and make your business work the way you want it to.
It’s easy, and although you may need some employees later, for now, this is what you need:
- You can choose a niche to support small businesses and local businesses such as tree trimming or septic tank maintenance. Even promote a franchise, but smaller ones.
- Reach out to them and offer to create a website.
- After you have closed the deal, you can start building the site.
- You must rank the site on Google to generate traffic. This is part of your job.
- Once your website is stable, you can start to generate leads by converting traffic.
- You get paid per lead.
You don’t need to repeat the same steps twice with passive income. After you’ve completed the setup and generated traffic, you can wait for companies to pay you.
You will need to invest in training and tools. The investment is often much lower than any KFC franchise or big options.
Are you unsure where to begin? This training program is a great resource!
Here’s Our #1 Recommended Online Business Model:
Interested in starting an online business to build passive income? Check out the local lead gen business model. Click here to learn more.
