Fast Food Franchises

Since 1952, KFC has been serving up Colonel Sander’s "finger licken' good" chicken diners to people all over the world.  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.

Popeye's entered the market in 1972 and quickly became a favorite for their Louisiana style food.  Popeye's distinguishes itself within the fast food franchise industry by having a unique "New Orleans" style menu that features spicy chicken, chicken tenders, fried shrimp and other seafood items.  Today the company operates over 2,000 franchises worldwide.

These two companies own a good portion of the market share when it comes to fast food franchises that specialize in this type of food.  If you are looking to get into this market, you have to decide between KFC vs. a Popeye’s franchise. So, which fast food franchise is the better investment?  In my opinion, it’s Popeye's.

KFC’s Financial Troubles

In 2012, KFC was dealt a financial blow when it lost 29 of its franchise locations in the United States when the owner of the locations filed for bankruptcy.  Popeye’s was quick to capitalize on the failing fast food franchises and presented a deal to purchase all of the recently closed locations for just about $14 million with the intent to reopen them as Popeye’s franchises.  The deal was accepted by the bankruptcy court and the restaurants closed down, rebranded, redecorated and reopened as Popeye’s.  While KFC is growing in popularity internationally, in the US, KFC is known as a brand that has been struggling as restaurants continue to close.

Taste and New Products

While I personally don’t eat at either KFC or Popeye’s, I have seen several reports that indicate that Popeye’s offers a better quality product than 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."

Another common complaint that I have heard is that KFC’s quality of chicken has declined and become greasy.  Additionally, KFC has been criticized for not adding new items to their menu as frequently as other fast food chains do.

Reputation

Let's not forget the PR nightmare that occurred in 2004 when KFC’s supplier was accused of animal cruelty.  PETA filed law suits against them and still to this day has a website dedicated to boycotting their company.  KFC has been at the center of bad PR for years and something like this can stick with a company indefinitely.

The Conclusion

Popeye’s is a growing brand, while KFC seems to be losing popularity in the US. 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. Years of bad PR pile on to the list and on top of everything I mentioned here, opening a KFC franchise requires an initial investment of $1.2 - $1.8 million while a Popeye’s franchise ranges between $306,000 and $371,000.  When looking to buy a fast food franchise, if you are deciding between Popeye’s or KFC, in my opinion, Popeye’s is the better investment.

Peter Siegel, MBAAbout This Contributor: Peter Siegel, MBA is the Founder & Senior Advisor (ProBuy & ProSell Programs) at BizBen.com (established 1994, 8000+ California businesses for sale, 500 new & refreshed postings/posts daily) working with business buyers, business owners/sellers, business brokers, agents, investors, and advisors). Phone him at 866-270-6278 or 888-212-4747 to discuss strategies regarding buying, selling, (or financing a puchase of) California businesses.


Categories: BizBen Blog Contributor, Franchises For Sale, How To Buy A Business



  Helpful Resources To Assist In Selling And Buying California Businesses

Manjit Singh: SF Bay Area - Business Intermediary

Assistance in the San Francisco Bay Area. Contact me about buying or selling a restaurant, liquor store, gas stations, markets, and c-store businesses. If you are looking to buy or sell a SF Bay Area liquor store, market, c-store, restaurant, etc phone me direct at 510-417-9429.

Matt Sadati, Business Broker, SF Bay Area, Northern CA

I have Engineering and Law, JD degree, with over 30 years of experience in all phases of entrepreneurship. During the past 15 years my concentration has been in business of mergers and consulting. I have owned and operated over 33 businesses each having one to 30 branches.

Mike Brewer: Liquor License Brokers, ABC Consulting Services

Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.

Jeff Sacher, Business Broker - North Bay Restaurant, Retail Specialist

Jeff is a leader in business brokering in the North Bay. Since joining Santa Rosa Business And Commercial in 1999 he has assisted Buyers and Sellers in over 200 business sales and acquisitions. Jeff provides other services for his clients as well. Reach Jeff and his team at 707-888-4972.

William Park, Business Broker - Southern California

Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.

Ron Hottes, Broker - Serving LA, Orange, Inland Empire Area

LINK Business is a business brokerage team of 28 highly skilled and seasoned professionals. Our business brokers have over 100 years of cumulative experience & the expertise to help you buy or sell a business in the LA County, Orange, Inland Empire areas. Call Ron for a consultation at 310-539-8300.

Ryan Clark, Business Broker, Southern California

The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan at 310-652-8353.

Michael Floorman, Business Broker, BTI, San Francisco Bay Area

Business Team, San Jose (Campbell) located in the Pruneyard Towers at Bascom and Hamilton. Established in 1981 Business Team with over 6600 sales to date has 1000 business listings to choose from, paid Google advertising. We offer highly trained and experienced professionals.


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