KFC, also known as Kentucky Fried Chicken, is one of the largest fast food restaurant chains that has had restaurants in India since 1995. Getting a KFC franchise in India is considered highly profitable as KFC is a world-renowned franchise, however, it is also capital-intensive.
To know how much one has to invest to run this business, let’s explore more about KFC franchise cost and setup in India.
KFC Introduction
KFC mainly follows a franchising system that implies the right to the independent use of KFC trademarks and the sale of food and beverages in particular locations to particular purchasers.
In return for the franchise rights, franchisees pay KFC an initial amount of cash referred to as the franchise fee, and then, in addition, pay royalties.
Here are some reasons why starting a KFC franchise in India would be beneficial for you:
- Strong brand recognition: Customer trust and awareness of the product immediately.
- Proven business model: Use of a well-established operational model.
- Training and support: Full coverage on the best strategies for handling a restaurant business and preparing meals.
- Established supply chain: Availability of quality raw stock and raw materials.
- Ongoing innovation: Continual change of menu and modifications to the customers’ preferred cuisine.
KFC Franchise Cost, Investment, and Requirements
Exploring the possibilities of becoming a part of the global breakthrough seller KFC in India and opening a franchise you need to consider several influencing factors.
KFC operates as a division of Yum!, which has other well-known outlets such as Taco Bell, Pizza Hut and WingStreet. The brands offer much support to franchisees that own the outlet; consequently, you will be in charge of managing the outlet.
A KFC franchise in India requires something beyond brute capital. It is profoundly important to create a strong management base for business since this is the key factor for its successful evolution.
✍️ Author’s Note:
KFC LLC expects franchisees to undergo training on programs conducted by KFC LLC. Computer-based and written training, management training, group training, and job training are all provided by KFC.
The success of the training program that this study proposed as the core component of the essential operator restaurant training program is the ability to train other employees.
Below is a detailed breakdown of the KFC franchise costs, investment, necessary documents, and the potential return on investment (ROI).
Franchise Requirements
You will require a specific area and investment norm to open KFC in India as a franchisee. A step further, KFC requires professional individuals who best manage an increased operational environment such as a restaurant. Here are the essential requirements:
- Initial Investment: Depending on the location and size of the outlet, it comes to around ₹1-2 crore.
- Franchise Fee: Around ₹36 lakh.
- Property Size: Minimum area of 1,000-1,500 sq. ft for a dine-in restaurant.
- Royalty Fees: Ongoing royalty fee of 5% of the gross sales.
- Training: KFC provides comprehensive training for franchise owners and staff.
- Marketing Fees: Franchisees are expected to contribute to national marketing, typically around 5% of sales.
Affordable royalty fees and the backing that comes with it make KFC a good opportunity for those who want to invest in the fast food industry.
Something to Note: KFC does not offer individual franchise rights on request. Instead, the company partners with a few franchisees after following the proper process.
Total Cost & Investment
These figures are just approximate values as the prices can change per location and other factors. Here’s a rough estimate of the initial investment required:
- Total Investment: ₹1.5 to ₹2.5 crores
Cost Breakdown:
- Outlet Setup (Furniture, Interiors, Design): ₹80 lakhs to ₹1.2 crores
- Franchise Fee: ₹36 lakhs to ₹40 lakhs (one-time payment)
- Equipment & Kitchen Setup: Around ₹50 lakhs
Initial Inventory & Operational Costs: ₹20 lakhs to ₹30 lakhs
Agreement Terms
The first franchise agreement lasts for 20 years. If the franchisee wants to continue after that, they can renew it, but the new terms and conditions will depend on how well the franchise performs.
- Agreement Duration: 20 years
- Renewal Options: Subject to meeting performance standards and compliance with KFC’s guidelines
Required Licences and Documentation
To apply for a KFC franchise, you’ll need to prepare several licences and documents to ensure legal compliance and smooth operations under KFC’s well-established brand.
Required Documents Include:
- Business Licence
- Food License (FSSAI)
- Trade License
- GST Registration
- Health and Safety Permits
- Fire Safety Certificate
- Signage Approval
- Labor Law Compliance
- Lease Agreement
- Insurance
Expected ROI
Given KFC’s international popularity and strong customer loyalty, franchisees can expect a solid return on investment. The expected ROI period is typically between 4 to 5 years, depending on the location, foot traffic, and market conditions.
- Expected ROI: 4 to 5 years
KFC’s comprehensive marketing, operations, and training support helps franchisees quickly achieve profitability and sustainable growth.
How do you apply for a KFC franchise in India?
If you want to apply for a KFC franchise, then go to KFC’s franchise official website or click here.
You can see the “Franchise Application” button here. Click on it, and you’ll be redirected to an application.
Fill in your personal details here, including your experience in the business, how many years you’ve worked, and the franchise address.
When you submit the form, you’ll be shown a message that a KFC agent will contact you soon for further processes. Stay tuned!
Wrapping Up
Having explored various franchise opportunities, I can confidently say that starting a KFC franchise can be rewarding for aspiring entrepreneurs. While the initial investment might be higher than starting a new business from scratch, the advantages of partnering with a well-established brand like KFC often outweigh those costs.
In my experience, two key factors in opening a franchise are the location and understanding your target customers. It’s crucial to research where you plan to set up your business thoroughly. Get to know the needs and preferences of the local community. This personal approach can greatly enhance customer loyalty.
Additionally, don’t overlook the extensive support offered by Yum! Brands. They have a wealth of market and operational knowledge that can be incredibly helpful for newcomers in the fast-food industry.
Disclaimer:
While writing this article, we conducted extensive research using publicly available data. The investment, ROI, and expected returns may vary based on location and updates related to Zudio.
If you find any incorrect information on this page, please let us know at [email protected].
- The article was last updated on October 09, 2024.
