The initial KFC Franchise Fee is $135,000 to $540,000 and is called the Development Fee. The estimated total investment necessary to begin the operation of a KFC Franchise ranges from $1,440,600 to $3,163,550. Based on the median sales provided by KFC’s franchise locations, at an average of a 15% profit margin it will take around 13.5 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin which would elongate getting a return on your investment.
KFC offers people the opportunity to be a part of a business that has established itself firmly in the industry. Fried chicken and KFC are terms that are becoming synonymous in parts of the U.S.A. and the world. KFC is a strong franchisor and depending on location, you might make much more than the median sales.
2. Zaxby’s is a private fast-casual restaurant chain in the United States. The first Zaxby’s opened in 1990 in Statesboro, GA by co-founder and CEO Zach McLeroy. Today, Zaxby’s has 908 (as of 2021) stores in the U.S., and aims to “bring encore experiences that enrich lives, one person at a time”. In recent news, CEO Zach McLeroy also bought out his partner, Tony Townley, the share of the company in early 2021.
Its popular menu items include chicken wings, chicken fingers, sandwiches, and salads. It is a growing business with 908 stores in the US as of 2021.
Overall, the initial investment ranges from $351,000 to $718,500. The average gross revenues of the franchised stores in 2020 were $2,248,862, a 3.8% change from last year. Considering that COVID had negatively impacted the food and beverage industry during that year, it is impressive that the average sales increased since the previous years. The highest gross revenue was about 90.52% above the average. And the lowest gross revenue was about 71.97% below the average for franchise stores.
Based on the 2020 average gross revenues for a Zaxby’s franchise of $2,248,862, and a midpoint initial investment of $534,750 it will take around 3.5 years to reach breakeven.
Zaxby’s is a growing business within the food and beverage industry. The initial investment ranges from around $351,000 to $718,500. With ongoing fees like royalty of 6% as well as marketing and advertising fees to consider.
However, the net worth requirement of $1,000,000 and liquid cash requirement of $500,000 might not be affordable for some.
3. Dave’s Hot Chicken was created by friends Dave Kopushyan, Arman Oganesyan, and Tommy and Gary Rubenyan. Dave, a chef trained in Thomas Keller’s (French Laundry) organization wanted to create the perfect Hot Chicken. The four friends scraped together $900 to put a tiny stand in an East Hollywood parking lot with a simple menu.
A year later, the boys had the money to open a shop in a strip mall with décor by local street artists, where the crowds continued to grow with wait times of an hour and more.
Today, there are 37 Dave’s Hot Chicken Locations with 24 of the 25 franchises opening in 2021.
The initial investment to start a Dave’s Hot Chicken Locations ranges between $626,300 and $1,413,500. Being a relatively new concept, Dave’s Hot Chicken has not disclosed any financials but we estimate their Average Unit Volume to be $793,885. At an average profit margin of 15%, it will take around 10 years for you to recuperate your initial investment.
Dave’s Hot Chicken could be a big concept in the future, but considering that it has only seen franchise growth in 2021, we recommend waiting for the franchises to prove the concept successfully.