It all tastes like chicken. Right? Which fast food franchise is a better investment, KFC or Popeyes? Arguments can be made for both sides. However, I believe Popeye’s to be the better franchise to invest in. Let’s further examine each franchise.
Kentucky Fried Chicken, aka KFC as it is commonly known today has been serving Colonel Sander’s signature “finger licken’ good” chicken dinners to customers across the globe since 1952.
KFC is famous for its Original Recipe® fried chicken. The story goes that the recipe for their famous chicken that is still used today, was created and perfected by Colonel Sanders more than a half century ago. KFC has grown into an international company that serves more than 12 million customers each day through a network of 22,200 restaurants in 109 countries and territories around the world. KFC’s popularity is growing internationally. Opening a KFC franchise is not cheap and requires an initial investment of $1.2 - $1.8 million.
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Despite KFC’s history and expansion into international markets, KFC has experienced recent financial trouble. In 2012, an owner of 29 locations in the United States filed for bankruptcy. The bankruptcy of an owner that controlled 29 locations could be a red flag that their franchisees don’t have the support that they need or that the proper training was not it in place to help franchisees remain successful in business. Popeye’s actually ended up purchasing these troubled locations for $14 million and reopened them as Popeye’s restaurants. KFC is currently struggling here in the U.S.
KFC has had other troubles over the years in addition to financial troubles. In 2004, KFC’s supplier of chicken was accused of animal cruelty. PETA got involved and filed a law suit against them and currently has a website that presently boycotts their company. This bad PR has haunted the company for years and unfortunately they just cannot make it disappear.
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Popeye’s has been around since 1972 and offers a New Orleans, Louisiana style fast food menu that includes spicy chicken, chicken tenders, fried shrimp and other seafood options. Today the company operates over 2,000 franchises worldwide. Popeye’s franchise ranges between $306,000 and $371,000.
It seems as far as quality is concerned, Popeye’s is offering a better quality product then KFC. When comparing their biscuits, Carol Tice a contributor for Forbes.com said, “Take a biscuit from each chain and have a bite, and any questions you have will be resolved. KFC’s biscuit is a biscuit. Popeyes’ biscuit is a buttery, melt-in-your-mouth little slice of pure buttermilky heaven. It doesn’t even need anything on it.” *
Complaints have been noted that KFC’s quality of chicken has declined over the years and become increasingly greasy. Additionally, KFC has been criticized for not adding new items to their menu as frequently as other fast food chains do.
In conclusion, a Popeye’s franchise initial investment is considerably less than that of a KFC franchise. Popeye’s is a growing brand offering quality fast food. Whereas, KFC has experienced financial trouble, bad PR, and quality issues that have contributed to the restaurants declining popularity in the U.S. It’s obvious to me that owning a Popeye’s franchise is the better investment.
* Why Popeyes is Buying Up Bankrupt KFC Restaurants by Carol Tice. Source: http://www.forbes.com/sites/caroltice/2012/10/25/popeyes-buys-up-bankrupt-kfc-restaurants/
About The Author: Peter Siegel, MBA is the Founder & President of BizBen.com a website for businesses for sale, businesses wanted to buy, resources, & articles and the BizBenNetwork Online Community. Reach him at 866-270-6278 or 866-270-6278 to discuss strategies regarding buying, selling, and financing small to mid-sized businesses.
