Set up a KFC Franchise

Estimated Dollar Rate

Initial Costs Min($) Max($) AVG(IN IC)

Application & Background Check Fee (per person) $300 $500 26000.00
Initial Franchise Fee $45,000 $45,000 2925000.00
Training Expenses $2,500 $9,500 390000.00
Permits, Licenses, and Security Deposits $50,000 $100,000 4875000.00
Real Property $400,000 $1,100,000 48750000.00
Building & Site Costs $534,000 $745,000 41567500.00
Equipment, Signage, and Dcor, POS & MERIT $280,000 $385,000 21612500.00
Start-up Inventory $10,000 $10,000 650000.00
Grand Opening Expense $5,000 $5,000 325000.00
Additional Funds $50,000 $75,000 4062500.00
Total Estimated Expenditure $1,453,800 $2,576,000 130968500.00

Staff
Staff Salaries No.(Assumed)
Cashier 12968 1
Computer Operator 16800 2
Delivery Driver 10000 1
New Graduate 17000 1
Office Assistant 14000 1
Restaurant Manager 33473 1
Shift Manager 16270 1
Trainer 111500 1

Initial Funding Min Max Actual

Loan borrow from Yum $200,000 $500,000 $32,500,000
Interest Rate - Commercial Loan
Equity
65

Estimate Of Business

Number of
Food Items Units Sold / Price Total Sales
day(Assumed)

Burgers
Potato Krispers 3 35 105
Chicken Rockin 10 89 890
Chicken Zinger 12 119 1,428
Chicken Snacker 15 45 675
Cheezy Crunch Burger(veg) 3 85 255
Paneer Zinger 2 119 238
-
Rollers -
Cheezy Crunch Wrap 5 79 395
Chicken Roller 15 85 1,275
-
Snacks -
Hot Wingle(2 pc) 15 55 825
Veg Stripa(3 pc) 5 59 295
-
Singles -
Crispy Strips(3 pc) 8 99 792
Wings (4 pc) 8 99 792
Pop corn(Reg) 2 65 130
Pop corn(med) 2 99 198
Pop corn(lag) 1 149 149
-
KFC Chizza Bites 10 179 1,790
-
Chicken -
Hot n Crispy(2 pc) 15 155 2,325
Hot n Crispy(3 pc) 10 225 2,250
Hot n Crispy(4 pc) 8 295 2,360
-
Buckets -
KFC Friendship Bucket 15 199 2,985
KFC Friendship Bucket 7 399 2,793
Hot n crispy 5 435 2,175
Fried grilled 5 435 2,175
Variety Bucket 2 599 1,198
-
Krusher -
Sparkling 10 59 590
kold Koffee 20 105 2,100
Fruitzers 10 95 950
-
Rice Bowlz -
Veg Strips 3 119 357
Fiery Grilled 20 159 3,180
Total Daily Revenue 35,670

Profit Calculations
Year - 1 Year - 2
Revenues 13,019,550 14,321,505
y/y (%) growth 10%
Royalty 650,977.50 716,075.25
Local Advertising 65,098 71,608
National Co-op expenses 585,880 644,468
Audit - 0
Administrative 32,500 32,500
Additional Services 97,500 97,500
Costs, expenses and attorneys' fees - -
Indemnification - -
Late royalty payments - -
Food Standards Consultations (FSC) 18,688 18,688

Support Services and Software

Maintenance for KFCC's MERIT System 122,156 122,156
Operating Expenses 248,811 248,811
One System Fund Fee 209,625 11,700
Operating profit 10,988,316 12,358,000
Interest Expense - -
Profit Before Tax 10,988,316 12,358,000
Tax @ 14.5% vat + 4.9% service tax eff 20% 2,197,663 2,471,600
Net Profit 8,790,653 9,886,400

Cash Flow Calculations 1 2

Year- 0 Year - 1 Year - 2
Operating Cash Flows/Net Profit 8,790,653 9,886,400
Initial Investment (130,968,500)
Debt amount raised / (repaid) 32,500,000
At the end of 5 years deposit amount
would be returned
Total Cash Flows -98468500.00 8790652.56 9886400.16
Equity IRR 15.96%

Opportuity Cost
Compounded Annual Growth Rate
Interest Rate %
16% 10% 11%
20% 24.3% 24.1%
25% 25.2% 25.1%
30% 26.3% 26.1%
35% 27.5% 27.1%
Debt %

40% 28.8% 28.4%

45% 30.2% 29.8%
50% 31.9% 31.4%
55% 33.9% 33.3%
60% 36.3% 35.5%
Royalty (%) Royalty(Rs)

-
5% 5.25
5% 44.50
5% 71.40
5% 33.75
5% 12.75
5% 11.90
-
-
5% 19.75
5% 63.75
-
-
5% 41.25
5% 14.75
-
-
5% 39.60
5% 39.60
5% 6.50
5% 9.90
5% 7.45
-
5% 89.50
-
-
5% 116.25
5% 112.50
5% 118.00
-
-
5% 149.25
5% 139.65
5% 108.75
5% 108.75
 5% 59.90
-
-
5% 29.50
5% 105.00
5% 47.50
-
-
5% 17.85
5% 159.00
1,784

Minimum Royalty=643500 Per year

Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8
15,753,656 17,329,021 19,061,923 20,968,115 23,064,927 25,371,420
10% 10% 10% 10% 10% 10%
787,682.78 866,451.05 953,096.16 1,048,406 1,153,246 1,268,571
78,768 86,645 95,310 104,841 115,325 126,857
708,914 779,806 857,787 943,565 1,037,922 1,141,714
0 0 0 0 0 0
32,500 32,500 32,500 32,500 32,500 32,500
97,500 97,500 97,500 97,500 97,500 97,500
- - - - - -
- - - - - -
- - - - - -
18,688 18,688 18,688 18,688 18,688 18,688

122,156 122,156 122,156 122,156 122,156 122,156

248,811 248,811 248,811 248,811 248,811 248,811
11,700 11,700 11,700 11,700 11,700 11,700
13,646,936 15,064,765 16,624,377 18,339,950 20,227,080 22,302,923
- - - - - -
13,646,936 15,064,765 16,624,377 18,339,950 20,227,080 22,302,923
2,729,387 3,012,953 3,324,875 3,667,990 4,045,416 4,460,585
10,917,549 12,051,812 13,299,501 14,671,960 16,181,664 17,842,339

3 4 5
Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8
10,917,549 12,051,812 13,299,501 14,671,960 16,181,664 17,842,339
 10917548.52 12051811.71 13299501.23 14671959.70 16181664.01 17842338.75

Interest Rate %
12% 13% 14%
24.0% 23.9% 23.7%
24.9% 24.7% 24.5%
25.8% 25.5% 25.3%
26.8% 26.5% 26.2%
28.0% 27.6% 27.2%
29.3% 28.8% 28.3%
30.8% 30.2% 29.7%
32.6% 31.9% 31.2%
34.7% 33.8% 33.0%
 Year - 9 Year - 10 Year - 11 Year - 12 Year - 13 Year - 14 Year - 15
27,908,562 30,699,418 33,769,360 37,146,296 40,860,925 44,947,018 49,441,719
10% 10% 10% 10% 10% 10% 10%
1,395,428 1,534,971 1,688,468 1,857,315 2,043,046 2,247,351 2,472,086
139,543 153,497 168,847 185,731 204,305 224,735 247,209
1,255,885 1,381,474 1,519,621 1,671,583 1,838,742 2,022,616 2,224,877
0 0 0 0 0 0 0
32,500 32,500 32,500 32,500 32,500 32,500 32,500
97,500 97,500 97,500 97,500 97,500 97,500 97,500
- - - - - - -
- - - - - - -
- - - - - - -
18,688 18,688 18,688 18,688 18,688 18,688 18,688

122,156 122,156 122,156 122,156 122,156 122,156 122,156

248,811 248,811 248,811 248,811 248,811 248,811 248,811
11,700 11,700 11,700 11,700 11,700 11,700 11,700
24,586,351 27,098,122 29,861,069 32,900,312 36,243,478 39,920,962 43,966,193
- - - - - - -
24,586,351 27,098,122 29,861,069 32,900,312 36,243,478 39,920,962 43,966,193
4,917,270 5,419,624 5,972,214 6,580,062 7,248,696 7,984,192 8,793,239
19,669,081 21,678,497 23,888,856 26,320,249 28,994,783 31,936,769 35,172,955

Year - 9 Year - 10 Year - 11 Year - 12 Year - 13 Year - 14 Year - 15

19,669,081 21,678,497 23,888,856 26,320,249 28,994,783 31,936,769 35,172,955
19669080.97 21678497.42 23888855.50 26320249.40 28994782.68 31936769.29 35172954.57
Year - 16 Year - 17 Year - 18 Year - 19 Year - 20
54,385,891 59,824,481 65,806,929 72,387,621 79,626,384
10% 10% 10% 10% 10%
2,719,295 2,991,224 3,290,346 3,619,381 3,981,319
271,929 299,122 329,035 361,938 398,132
2,447,365 2,692,102 2,961,312 3,257,443 3,583,187
0 0 0 0 0
32,500 32,500 32,500 32,500 32,500
97,500 97,500 97,500 97,500 97,500
- - - - -
- - - - -
- - - - -
18,688 18,688 18,688 18,688 18,688

122,156 122,156 122,156 122,156 122,156

248,811 248,811 248,811 248,811 248,811
11,700 11,700 11,700 11,700 11,700
48,415,948 53,310,678 58,694,881 64,617,505 71,132,391
- - - - -
48,415,948 53,310,678 58,694,881 64,617,505 71,132,391
9,683,190 10,662,136 11,738,976 12,923,501 14,226,478
38,732,758 42,648,543 46,955,905 51,694,004 56,905,913

Year - 16 Year - 17 Year - 18 Year - 19 Year - 20

38,732,758 42,648,543 46,955,905 51,694,004 56,905,913

(32,500,000)

4,875,000
38732758.37 42648542.55 46955905.15 51694004.01 29280912.75
Name of Fee Low High
Application & Background Check Fee (per person) $300 $500
Initial Franchise Fee $45,000 $45,000
Training Expenses $2,500 $9,500
Permits, Licenses, and Security Deposits $50,000 $100,000
Real Property $400,000 $1,100,000
Building & Site Costs $534,000 $745,000
Equipment, Signage, and Dcor, POS & MERIT $280,000 $385,000
Start-up Inventory $10,000 $10,000
Grand Opening Expense $5,000 $5,000
Additional Funds $50,000 $75,000
Total Estimated Expenditure $1,453,800 $2,576,000
Other Fees
Type of Fee Amount
Royalty 5% of gross revenues or a minimum of $825, wh
Local Advertising 0.5% of gross revenues (or as agreed to with loc
National Co-op 4.5% of gross revenues.
Renewal $6,750 (subject to adjustment based upon the C
Transfer For existing franchisees $3,375 for first outlet an
For new franchisees $6,750 for first outlet and $

Audit Entire cost of audit, including expenses of auditi

Administrative $500 services fee for each transaction in which K
Additional Services $0 - $2,000
Costs, expenses and attorneys' fees Will vary.
Indemnification Will vary.
Late royalty payments 1 - 1.5% per month.
Food Standards Consultations (FSC) $287.50 per follow-up assessment.
Support Services and Software Maintenance for KFCC's MERIT System $156.61 per unit/per month. For franchisees no
One System Fund Fee $1,065 per restaurant (one-time enrollment fee)
 Financing Min Max
Loan borrow from Yum $200,000 $500,000
YUM Minority Lending Assistance Program: $3,000,000 25% of principal amount

Terms of Agreement 20 YEARS AND Renewable

ues or a minimum of $825, whichever is greater per month (minimum fee subject to adjustment based upon the Consumer Price Index).
nues (or as agreed to with local advertising co-ops).

adjustment based upon the Consumer Price Index) if the Letter Agreement is signed. If franchisees signs certain Amendments, they have n
isees $3,375 for first outlet and $1,688 for each additional outlet in the same transaction.
es $6,750 for first outlet and $3,375 for each additional outlet in the same transaction.

t, including expenses of auditing personnel.

for each transaction in which KFCLLC processes changes to franchisees corporate structure or when processing other approved modificatio

w-up assessment.
per month. For franchisees not operating under the New MERIT Agreement, the monthly MERIT Fees will be $171.50
ant (one-time enrollment fee); then $180 per restaurant/per month (plus applicable tax and shipping) (reoccurring payments).
 incipal amount

on the Consumer Price Index).

ertain Amendments, they have no right of renewal.

ssing other approved modifications.

occurring payments).