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Franchising - Be your own Colonel

Be your own Colonel

Based in Louisville, Kentucky, KFC Corporation is the franchisor of the world’s most popular chicken restaurant chain, specializing in Original Recipe®, Extra Crispy™, Kentucky Grilled Chicken® and Extra Crispy™ Tenders with home-style sides, Hot Wings™ pieces and freshly made chicken sandwiches. Famous for its Original Recipe® fried chicken, which is made with the same secret blend of 11 herbs & spices that Colonel Sanders perfected more than a half-century ago, KFC has been serving customers complete, freshly prepared family meals since Colonel Harland Sanders founded the concept in 1952.

It is estimated that, on average, more than 185 million people see a KFC commercial at least once a week—that’s more than half the U.S. population. The KFC system serves more than 12 million customers each day in more than 115 countries and territories around the world. KFC operates more than 17,000 restaurants in the United States and internationally. KFC’s parent company is Yum! Brands, Inc., the world’s largest restaurant company in terms of system restaurants, with more than 40,000 locations in more than 130 countries and territories and employing more than one million associates. Yum! is ranked number 201 on the Fortune 500 list, with revenues exceeding $13 billion in 2012.

DO I QUALIFY TO BE A FRANCHISEE?

There are several factors we consider when assessing an applicant desiring to become a KFC franchisee, including but not limited to their:

  • Multi-Unit Operations Experience
  • Financial Qualifications
  • Personal and Financial Reputation
  • Motivation and Commitment
  • Culture and Brand Fit
  • Growth Mindset

EXAMPLE OF A NEW FRANCHISEE ASSESSMENT SUITABLE FOR CONSIDERATION

Multi-Unit Operations Experience

  • Proven track record in operating a multi-unit restaurant or hospitality business (preferably quick service restaurant)
  • Successful business ownership experience (preferably multi-unit restaurant)

Financial Qualifications

  • $1,500,000 Total Net Worth
  • $750,000 Total Liquid Assets*
  • Net Worth and Liquid capital access commensurate with ownership level (may vary significantly from minimum requirements)

Personal & Financial Reputation and Stability

  • No criminal convictions, No history of litigation, Bankruptcy history
  • Minimum Credit Score of 700
  • Business history and reputation, referrals
  • Press/Social Media

Motivation and Commitment

  • Willingness to guarantee Franchise Agreement obligations
  • Time commitment for required training programs (includes entire organization)
  • Hands on in the day to day operation of the business, Residency/proximity

*Liquid Assets are defined as cash or any asset that could be converted to cash within 10 business days

FREQUENTLY ASKED QUESTIONS

What are the minimum financial requirements?
Candidate must have $1.5 Million in total net worth and $750,000 in liquid assets (liquid assets are defined as cash or any asset that can be converted to cash within 10 business days). Requirements are commensurate with ownership level and may be significantly higher from minimum requirements based on the size of the transaction.
How long does the Franchise Assessment Process take?
Initial review of the Franchise Assessment Process, including background checks and interviews, generally takes 8 - 12 weeks. If a franchisee candidate meets the initial review criteria and is found eligible to proceed, a transaction review and approval will be required for all transfers or new development opportunities.
Are there Opportunities to acquire existing restaurants?
Yes, there are opportunities to acquire existing restaurants. If franchised restaurants are identified for sale, all negotiations will occur between the buyer and seller. All transfers (acquisitions of existing franchised stores) must be reviewed by KFC US LLC through the Transaction Approval process prior to any approval of the transfer.
There’s already a KFC in my market, can I add another one?
Existing KFC operators have a protected territory of 1.5 miles or 30,000 people, whichever is smaller. Prior to allowing the establishment of any new franchised restaurant, KFC US LLC is obligated to give the closest franchisee 30 days prior written notice of the proposed new location. During the 30 day period, the franchisee may apply to KFCC for the right to build the restaurant and KFC US LLC shall negotiate in good faith with the franchisee, taking into consideration all relevant factors, including past and present operational performance and financial capabilities of the franchisee, etc.
Is KFC seeking new minority candidates?
Yes, KFC US LLC is committed to increasing the number of minority and women owned franchises.
How much will I pay in royalties and advertising? What fees will I pay when I become a KFC franchisee?

Royalties = 5 percent (5%) of Gross Revenues

Advertising = 5 percent (5%) of Gross Revenues (Includes national and local contributions)

The above amounts do not include all fees that will be incurred by the franchisee. Please refer to Item 6 and Item 7 of the KFC US LLC Franchise Disclosure Document (FDD) for details pertaining to new franchise application fees, transfer fees, training expenses, initial franchise fees, constructing a new restaurant, grand opening expenses and opening inventory. In addition, the franchise will be required to pay other fees, including but not limited to, monthly MERIT fees for the point of sale and back of house computer system support.

What will my sales be? How much money will I make? What will be my profit percentage? What are the profit margins of other franchisees? What kind of return on my investment may I expect?
KFC US LLC includes an Item 19 financial performance representation in the FDD. You will receive an FDD once you have submitted a completed franchise application package. Success involves risks and depends upon a franchisee’s ability as an independent businessperson. KFC can give no assurance or warranty as to potential sales or results, and prospective franchisees are encouraged to conduct their own independent investigation to determine potential sales levels prior to signing any Franchise Agreement. Existing franchisees are a resource you can use for more KFC franchise information. A list of domestic franchise units, the franchisee’s name and phone number are listed in the FDDs.
What kind of training is required by KFC?
Before you may begin operating your restaurant, you (or a principal), your manager and other employees identified on the tables in Item 11 of the FDD, must attend and complete, to KFC US LLC’s satisfaction, the initial training program offered by KFC US LLC on the operation of a KFC outlet. The training includes 1 week orientation, 2 weeks online training and 4 weeks in a certified restaurant for hands on training. All training costs incurred including travel and lodging of the management team are the responsibility of the franchisee. More details found in the KFC US LLC FDD Item 11.
Will I be required to use specific accounting service software at my restaurant?
KFC US LLC’s FDD describes the type of electronic cash register system and software requirements to be used in the restaurant. It is required that you use the KFC US LLC supported MERIT point of sale and back-of-house operating platform. You must prepare and keep detailed records regarding all sales and other financial aspects of your restaurant operations. You may also be required to submit reports of product mix, hourly and day-part sales and other reports as may be determined by KFC US LLC.
Is KFC listed in the Small Business Administration (SBA) Registry?
Yes, the franchise registry (www.franchiseregistry.com) is a national online listing of approved franchise systems whose franchisees will receive accelerated loan processing through the U.S. Small Business Administration (SBA). Through this process, small business owners are provided with higher levels of service and quicker loans. Franchise systems not listed on the site are not eligible for expedited loan processing through the SBA.
I am interested in KFC Franchising in another country. What is the process to become an International Franchisee?
Please visit the YUM Brands website at: http://www.yum.com/company/franchising-real-estate/ where you may find a listing of contacts for International Franchising interests.

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