BUSINESS PLAN

Business Plan for Launching KFC Franchise in UK



Table of Contents

Section A: Business and Products2

Kentucky Fried Chicken or KFC2

Business Products2

Current pricing trends3

Section B: Cost and Benefit Analysis3

Determining Target Selling Price3

Determining Per Unit Cost Statement4

Determining Breakeven Point5

Budget Income Statement6

Net Present Value7

Recommendations8

Conclusion9

Section C: Environmental and Social Responsibility10

Activities that could affect environment and society positively10

Lessons Learned11

References12

Appendices14

Business Plan for Launching KFC Franchise in UK

Section A: Business and Products

Kentucky Fried Chicken or KFC

KFC is considered as one of the biggest chain of fast food restaurants. Its primary head office is located in USA, Louisville, Kentucky. According to records it is considered as the second biggest chain of restaurants after McDonald's. It has about 17000 franchises operating across the world in about 105 countries. Colonel Harland Sanders initially started it. He is considered as a primary inventor of introducing the concept of the franchising of restaurants. Major competitor of KFC is McDonald's (kfc.com, 2012).

The main aim of the business report is to present a proposal for launching a franchise of KFC in London. There are already 840 restaurants operating in London and Ireland. The market of London for KFC has the capacity to employ about 8000 people, 40% of KFC operations are being owned and remaining 60% are being franchised. According to records, there was about $1 billion sales incurred due to KFC operations in UK and Ireland in 2009 and have accelerated in the past five years (kfcdevelopment.co.uk, 2012).

Business Products

The main food products offered by KFC worldwide are fried chicken, grilled chicken, chicken burgers, chicken sandwiches, potato wedges, salad, deserts and various other deals. All of these are complementary products and may vary depending on franchise location and food culture (kfc.com, 2012). We can broadly divide these items in three main products chicken and bakery items.

Current pricing trends

The prices of main products involved in KFC products and services particularly poultry products have surged up due to the government's approach of targeting inflation in UK. The consumer price index and retail price index have increased from 122.3 to 122.5 and from 242.1 to 241.8 in 2012 (Consumer Price indices, 2012). According to weekly commodity price index of poultry, chicken prices have surged by 16.6% annually, eggs have increased by 21.4%, cheese has increased by 5.9%, potatoes prices has been changing verily on weekly basis, and sugar has increased by 3.1% annually (Commodity Price, 2012).

The estimated price list for the food products of KFC can be calculated by considering the current market prices of existing KFC and McDonald's products in London as per 2012 by listaz.co.uk for opening a new franchise. These prices are mentioned in Appendices.

However, these prices are subject to change any time by the authorities and also incur certain percentage of GST tax in total amount of bill.

Section B: Cost and Benefit Analysis

Determining Target Selling Price

There are several methods to calculate selling price of the products offered by KFC. These methods include market price approach, selling prices based on profit margin, and selling prices based on multiple of ...