KFC Tenant Overview

Net Lease Advisor Tenant KFC


  • 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

Earnings Highlights

Earnings Summary
  • KFC reported same-store sales growth of 7%, beating Wall Street’s estimates of 2%
  • For third-quarter 2022, revenues from KFC totaled $704 million, up 1.7% year over year
  • KFC Division opened 485 gross new restaurants in Q3

Tenant Description

KFC is a one of the largest fast casual chicken chains.

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 five (5) years. There are some ground leases that are generally backed by a corporate guaranty. Most leases do contain 3 to 5, 5-year option periods.

The 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. Currently, KFC operates more than 24,000 outlets, of which, around seven percent are franchisee owned.

Harland Sanders, an honorary Kentucky Colonel, founded Kentucky Fried Chicken in 1930 in the small front room of a gas station in Corbin, Kentucky. The Colonel actively started franchising in 1952. PepsiCo then acquired Kentucky Fried Chicken 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, the 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 is owned by Yum! Brands. Other QSRs under the Yum! Brands banner include Pizza Hut and Taco Bell. KFC reported 7% growth in worldwide sales in 2016. KFC plans to couple a return to the basics with a push on the digital front and delivery. Yum! Brands is ranked number 218 on the Fortune 500 list, with revenues exceeding $6 billion in 2016.

Average Cap Rate
12 mo avg with 10+ yr lease term
Average Property & Lease
Average Sale Price $2,374,266
NOI $108,064
$/Square Foot $791 - $1,187
Building SF 2,000 - 3,000
Lot Size 0.5 - 1.2 Acres
Lease Term 20 Years
Escalations Varies
Stock Symbol YUM
Credit Rating
Moody's Ba2
Average Cap Rate Trend
Rates reflect last 12 mos, short and long-term
Recent Sales Comps
Nottingham, MD 4.00%
Chicago, IL 4.00%
St. Augustine, FL 4.12%
Pittsburgh, PA 5.22%