Tenant Report: KFC
KFC is a fast food brand specializing in chicken. With more than 19,500 stores in more than 115 countries and territories, KFC (Also known as Kentucky Fried Chicken) is the world’s second largest restaurant chain after McDonald’s measured by sales, and the world’s most popular chicken brand. KFC’s menu has evolved from its legendary Original Recipe pressure fried chicken (“11 herbs and spices”) and side dishes to include grilled chicken, chicken strips, chicken sandwiches, hot wings, and desserts.
KFC was founded by “Colonel” Harland Sanders in Kentucky in 1930 during the Great Depression. The first Kentucky Fried Chicken franchise was opened in Salt Lake City, Utah in 1952 by Pete Harman, who introduced the “Bucket O’Chicken” in 1957. Harman also is credited with the brand’s slogan “It’s finger-lickin’ good.”
KFC Corp. is based in Louisville, Kentucky, and is a subsidiary of Yum! Brands, which also owns Pizza Hut and Taco Bell. Yum! Brands has almost 42,000 restaurants in more than 125 countries and territories, making it one of the world’s largest restaurant companies. Over the years, KFC franchisees have had the option to co-brand with Taco Bell or Pizza Hut.
According to company figures, the KFC system serves more than 12 million customers daily. Most purchases are take out or to-go, although the stores also offer in-store dining. In 2015, Yum! Brands announced that KFC would begin deliveries by 2016, further expanding its reach to customers. KFC engages in extensive marketing to keep the brand in consumers’ minds: KFC claims an average of more than 185 million people see a KFC commercial at least once a week. KFC is also a pioneer in the use of social media to attract and engage customers.
KFC franchisees receive ongoing support through The Yum! Value Network, which offers programs and support that include brand recognition, customer attraction, competitive advantage, franchise value system, multi-unit growth, economic stability, giving back to the community, development expertise, access to financing, solid business support, quality on-boarding and training, a reliable supply chain, and return on investment.
Average CAP Rate (2019): 5.72%
Average CAP Rate (2018): 5.80%
Lease Guaranty: Corporate & Franchisee
Average Sales per Unit (Store): $1,300,000
Total Number of Units (# of Stores): 3,987 Units
Average Building Size: 2,900 Square Feet
Average Property Sales Price: $1,610,108
Average NOI (Rent): $92,100 / Year
Top State with Units: California (11%)
Credit Rating: Moderate (Moody's: Ba2)
Average lease Term: 15 Years