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  KFC


Average Property & Lease

Average Sale Price$1,335,017
CAP Rate (12mo avg with 10+ lease term)6.01%
NOI$73,097
$/Square Foot$450
Building Size2,300 +/- sf
Lot Size0.5 - 1.2 acres
Lease Term15 +/- Years
EscalationsVaries
CREDIT RATING
BB
S&P
Ba3
Moody's
view credit rating chart
View Net Lease Property Listings at CALKAIN.COM Last Updated: November 8, 2016
Net Lease Advisor Overview

KFC Corporation based in Louisville, Kentucky, is one of the few brands in America that can boast a decades-long history of success and has been operating for more than 70 years.

Generally, almost all KFC lease are NNN with a majority of KFC stores operated by a franchisee. The lease includes 7-8% rent increases every 5 years. There are some ground leases that are generally backed by a corporate guaranty. Most leases do contain 3-5, 5-year option periods.

Pros

Cons

  • NNN lease eliminates landlord responsibilities
  • Annual increases on most leases
  • Several lease extensions
  • Non-investment grade by both S&P and Moody's
  • Must look closely at performance of franchisor across all locations
Tenant Description

Harland Sanders, a honorary Kentucky Colonel, founded KFC in 1930 in the small front room of a gas station in Corbin, Kentucky. The Colonel actively started franchising in 1952. PepsiCo then acquired KFC in 1986, and in 1997, they announced the spin-off of its quick service restaurants - KFC, Taco Bell, and Pizza Hut now known as Yum! Brands, Inc. Headquartered in Louisville, Kentucky, KFC menu includes their popular Crispy Kentucky Grilled Chicken® and Extra Crispy™ Tenders with home-style sides, Hot Wings™ pieces and freshly made chicken sandwiches.

KFC operates more than 17,000 restaurants in the Unites States. With nearly 15,000 restaurants in 120 countries and territories, the brand generated $16 billion in annual system sales and has grown operating profit over the last three years at a 9% compound annual growth rate in constant currency. Their U.S. unit sales grew by 2%.

Yum! is ranked number 201 on the Fortune 500 list, with revenues exceeding $13 billion in 2012. Yum! Brands were honored by USGBC by being included in their recent publication "LEED in Motion: Retail."


KFC TREND
CAP Rate

2015 avg: 6.16%

2016 avg: 5.97%

RECENT SALES

Fort Oglethorpe, GA | 6.21%

Fort Lauderdale, FL | 5.25%

MORE INFO
www.kfc.com
Google Finance: YUM
Google News: YUM