How KFC chooses to invest in China

According to the overall cost of opening a KFC store, the capital investment in the early stage is roughly 7 million yuan.

1. The cost of the initial investment of joining.

The initial franchise fee is divided into the purchase fee of the restaurant, the initial franchise fee, and the training fee.

The restaurant's purchase fee refers to the cost of the franchisee's purchase of a KFC that is operating under the "no from zero" model. It includes all the equipment and décor of the restaurant, as well as the staff who have been trained. It also includes cash flow and profits generated in the later operating process.

However, the purchase does not include the KFC property and rental costs. The purchase fee starts at 2 million yuan and needs to be paid in a lump sum before the official handover. At present, the stores that KFC can transfer are basically small cities with high consumption levels.

The initial franchise fee is the cost required for the franchisee to obtain the KFC franchise for ten years. The cost is roughly 300,000 yuan, which is also a one-time cost for the franchisee to open a store at the beginning. The cost of the training is 53,000 RMB.

The content of the training includes KFC workstation operation and duty management. The cost of training will be arranged by KFC according to the actual situation of the franchisee. Before accepting the transfer of the store, you must attend and complete the restaurant training in person, and you must not be replaced by others.

2. Expenses during the operation period.

Fees paid during the period include franchise continuation fees, as well as advertising** fees. The franchise continuation fee is charged at 6% of turnover. The advertising fee is charged at 5% of the turnover.

3. Rent. When it comes to the question of how much it costs to open a KFC store, another important part of the fund is rent. To open a KFC storefront, you must be in a good location and location, but the rent in these areas is generally more expensive than other places.

KFC's requirements for stores are not low, the general standard is 100 square meters, and the annual rent of such stores in general third-tier cities is about 1 million.

4. Employees' salary expenses.

In general, a KFC needs about 20 employees. Its salary is roughly 3,000 yuan per month. The overall annual salary of employees is roughly 720,000 yuan.

5. Water and electricity bills.

Due to the large flow of customers and the long operating time, the water and electricity bill will be about 10,000 yuan a month. The annual utility bill is 120,000 yuan. <>

KFC China was sold to Yum China, with Primavera Capital Group and Ant Financial Services Group as shareholders. On September 2, 2016, Yum Restaurants announced that it has entered into an agreement with Primavera Capital Group ("Primavera Capital") and Ant Financial Services Group ("Ant Financial") to jointly invest US$100 million in Yum China, which will coincide with the spin-off of Yum Restaurants Group and Yum China.

Under the agreement, Primavera Capital and Ant Financial will invest US$100 million and US$50 million, respectively, in Yum China. Each share** is discounted by 8% based on the volume-weighted average price of Yum China** for a period of 31 to 60 days after the completion of the spin-off, and the final number (within the set upper and lower bounds) is subject to adjustment depending on the amount**.

Primavera Capital and Ant Financial also have two tranches of stock options exercisable over a five-year period, each at an exercise price of US$12 billion and US$15 billion, respectively, to acquire approximately 2% of Yum China's common stock.

Yum Restaurants Group also announced that the spin-off of Yum China's business and the investments by Primavera Capital and Ant Financial are expected to close on October 31, 2016. Yum China will then be listed and traded on the New York Stock Exchange as an independent company beginning November 1, 2016 as "YUMC".

Yum China, which previously had a high degree of independence from Yum Restaurants and contributed approximately 52% of profits**, will no longer hold a stake in Yum China, but Yum China will be required to pay a 3% royalty to Yum Group.

As of March 2021, KFC China has not been sold to anyone.

Over the past 30 years, KFC China has adhered to the strategy of "based on China and integrated into life", implemented the food health policy of "balanced nutrition and healthy life", and actively created "delicious, safe, high-quality and fast; Balanced nutrition and healthy living; Based on China, unlimited innovation".

We continue to innovate in product diversification and develop more foods suitable for the taste of Chinese. KFC pays special attention to the development of new products, and has established its own product development team since the mid-90s. In 1987, only 8 kinds of products were available at KFC restaurants in Qianmen, Beijing, but now there are at least 56 regular products to choose from, and more than 478 new products have been launched during this time.

KFC is a U.S. subsidiary of Yum Restaurant Group. Yum is headquartered in the United States.

KFC has formed a strategic alliance with PepsiCo to sell carbonated beverages provided by PepsiCo on a regular basis.

In June 2017, KFC ranked 81st in the "2017 Brandz Top 100 Most Valuable Global Brands" announcement. As of 17 February 2018, most KFC outlets in the UK remain closed. Of the 900 local stores, 562 were still closed as of February 20, and the number of stores that closed on the evening of February 18 peaked at 646.