In the Entrepreneur’s list of top global franchise, fried chicken chain KFC was ranked fourth among the restaurants. But has anybody ever thought, opening a KFC restaurant requires a lot of money, reported Business Insider.
The company requires operators to have at least $1.5 million in total net worth and $750,000 in liquid assets. According to Franchise Direct, KFC also charges its operators a $45,000 franchise fee. Franchise direct reports say that building and equipment costs include items like grills and fryers which range between 6, 95,000 and $1.2 million. Other fees, like training expenses and property costs, bring total startup expenses to between $1.3 million and $2.5 million. Franchisees also have to pay fees every month for royalties and advertising.
Jointly, the fee is equal 10 percent of gross sales, according to the company.
This is similar to what it costs to open a McDonald's restaurant. But McDonald's restaurants generate more than twice the amount of sales per unit compared to KFC restaurants.
By comparison, KFC restaurants on average generate roughly $942,000 in sales annually, QSR reports.
The company doesn't reveal any details about its franchisees' average profits.