Kentucky Fried Chicken Essay


Colonel Sanders started the Kentucky Fried Chicken at the age of 65. Soon KFC is one of the prima houses in nutrient industry around the universe. Over a billion KFC poulet dinners are served having the Colonel ‘s “finger likin ‘ good” formula, each twelvemonth.

At the age of 40 Drum sanders foremost started cooking in a service station in Corbin, KY. But shortly 100s of people started coming to the service station for nutrient alternatively for auto service. Soon he shifted to a hotel and eating house that had a capacity of keeping 142 people at a clip. With his particular cookery techniques, Sanders ‘ station became well-known and he was acknowledged for his unbelievable culinary art by the Governor at the clip, RubyLaffoonin 1935 when he was made a Kentucky Colonel.In 1939, Colonel Sanders ‘ eating house won the top topographic point on Duncan Hines ‘ “Adventures in Good Eating.”

In 1952 colonel smoothers got good start for his company and devoted the remainder of his life in franchising concern. By 1964, over six hundred franchised mercantile establishments were opened in theUnited StatesandCanadafor his poulet.

The company got listed on the New York Stock Exchange on January 16, 1969, merely 3 old ages after it had gone public on March 17, 1966.Then on July 8, 1971 the company was taken over by Heublin Inc, for $ 285 million dollars. Soon the company grew to an tremendous three 1000 and five 100s franchised and company-owned eating houses world-wide.But after being on a regular basis going around the Earth, Colonel Sanders died of leukaemia at the age of 90 in 1980.

Nowadays its portion of a bigger company known as Yum Brands.

Advantages To Parent Business

1. Financial: It is another beginning of income through franchise fee and royalty. Besides there is addition in Cash flow, return on investing and net incomes.

2. Operational: There is smaller centralised control as compared to developing and holding locations by company itself. It besides ensures consistence, enhanced productiveness and better quality. Self-motivation as franchisees invests their ain money.

3. Strategic: It helps in spliting hazard by holding multiple locations through people ‘s investing. That ensures faster web enlargement and a better chance to concentrate on altering market demands.

4. Administrative: With a smaller cardinal organisation, the concern maintains a more cost effectual labour force, no alteration in of import staff members and better enlisting.

Disadvantages To Parent Business

1. Franchisor is required to hold adequate resources to enroll, train and back up the new franchisees.

2. Franchisee may botch the image of the company if he is non capable of running the franchise absolutely.

3. Besides franchisor has to state all the internal information of the company to the franchisee. So, privateness of company is besides at risk.”

Marketing/ Ad

“The KFC Marketing squad focuses fierily on presenting an changeless grapevine of savory repasts. They try to seek the wants of the clients and convey new advanced merchandises to run into the client ‘s criterions. Target market is divided on the footing of demographic, geographic and psychographic sections.

The pricing scheme that they follow while come ining new market is monetary value planing. In get downing they try to monetary value their merchandise a spot high and aim the center and upper category people. Than after some clip they start take downing their monetary values to concentrate on center to take down category people. They do this to acquire to larger portion of the market.

The Marketing squad gives more importance to Operations and Product Excellence. They try to happen new ways to develop and put to death new thoughts, every bit good as measuring the input of the finance in the concern. The Marketing squad is the primary medium of communicating between the company and the clients. The budget of selling is divided in conformity to the media purchasing and advertisement production to vouch a twelvemonth unit of ammunition calendar of advanced intelligence to drive consumers back to our eating houses every clip.

Ad schemes are the same as any other house but they have their typical slogan “finger likin good” which relates to quality of nutrient they provide. KFC normally charges advertisement fee of 5 % of the gross gross to the single shops. KFC charges a Local advertisement fee of 3 % and fee equal to 2 % of the gross gross for national advertisement fee.

Operationss Management

KFC primary natural stuff is chicken. They are non breed in a normal manner. These poulets are kept alive by tubings inserted into their organic structures to coerce blood and foods right through their organic structure. They do non hold any beaks, plumes every bit good as pess. Their bone construction is well shrunk to acquire more meat out of them.

This is good for KFC because they do non hold to pay a immense measure for their production costs. There is seldom any plucking of plumes or the remotion of the beaks and pess. However this method has been disapproved of by many carnal rights organisations and has been upsetting the image of the company. There have been many instances against KFC sing the intervention of poulets in their farms.


Initial Investnment:

“ Outgo Low High
Initial Franchise Fee $ 25,000 $ 45,000
Development Services Fee Varies Varies
Real Property $ 400,000 $ 1,000,000
Construction and Leasehold Improvements $ 575,000 $ 915,000
Equipment/Signage $ 216,000 $ 366,000
Opening Ad $ 5,000 $ 5,000
Opening Inventory $ 10,000 $ 10,000
Utility Deposits and Business Licenses $ 7,000 $ 7,000
Initial Training $ 3,900 $ 10,000
Assorted Opening Costss $ 5,000 $ 15,000
Extra Fundss ( 3 months ) $ 13,000 $ 18,000
Entire $ 1,379,900 $ 2,391,000”

The figures are taken from the KFC web site. Please refer to the URL

FINANCIAL ASSISTANCE: The franchisor does non supply any indirect or direct funding. They do vouch any rental or duty. KFC is one of the parts of organisation named YUM trade names.

YUM Capital is a particular intent limited liability company structured under Delaware jurisprudence, the exclusive member of which is YUM Capital Funding Corp a non-stock corporation in Delaware. YUM Capital issues commercial paper secured by loans purchased from YUM Capital Funding Corp and made by YUM Capital Funding Corp to franchisees in YUM eating house trade names.

Royalty: KFC franchisees have to pay royalty fee equal to 4 % of gross grosss or else lower limit of $ 600 per month.

BREAK-EVEN Point: It is the status of a company when they are holding no net incomes. In other words when company is merely paying all its disbursals. If it has to be calculated from gross revenues than a certain figure has to be found out at which company is holding no net income. An estimated sum of gross revenues gross for 2010 is 21926 million dollars and the estimated gross is 1452 million dollars.

So break-even point should be the difference of gross revenues and gross i.e. 20474 ( 21926-1452 ) million dollars. This means company has to gain At least 20474 million dollars to cover up all its disbursals.

Human Resource Management

KFC stresses upon the fact that either franchisees or at least one of the directors should finish the preparation plan set-up by the company. But KFC is really rigorous about inquiring for employees to finish the preparation procedure as per the company ‘s discretion. Besides basic preparation if company has certain extra class work or plans they can inquire the franchisee, directors and employees to make those excessively. The preparation plan is by and large of 4 yearss, each holding a session of 8-10 hours each twenty-four hours. This sort of preparation technique helps in turning the efficiency of workers and directors and makes them accustomed with their work therefore cut downing the likeliness of mistakes and errors. But on the other manus this process can be clip devouring and can perchance go more dearly-won due to the inordinate preparation that the possible employees have to travel through earlier come ining the organisation.


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KFC Annual study.

Key Takeaway

This assignment helped in understanding different ways of pull offing a new concern. It made me familiar with the construct of holding a franchise concern, what are the benefits of holding franchise and what are the extra disbursals of holding a franchise concern. Besides that it gave me an chance to reexamine franchisees of KFC all over the universe and helped me significantly in analysing all the kineticss involved for holding KFC franchise. In future if I want to get down my ain concern I might give a penchant to franchise signifier depending upon the sort of concern I want to hold.