Kentucky fried chicken

Kentucky fried chickenEntrepreneurshipColonel Sanders started the Kentucky Fried Chicken at the days of 65. Presently KFC is one of the lead story firms in food industry around the world. Over a billion KFC chicken dinners argon served featuring the Colonels hitch likin good recipe, to each one year.At the age of 40 Sanders first started cooking in a table service station in Corbin, KY. But soon hundreds of people started coming to the service station for food sooner for car service. Soon he shifted to a hotel and restaurant that had a capacity of holding 142 people at a time. With his special cooking techniques, Sanders station became well-kn deliver and he was acknowledged for his incredible cuisine by the G overnor at the time, RubyLaffoonin 1935 when he was made a Kentucky Colonel.In 1939, Colonel Sanders restaurant won the top spot on Dun dope Hines Adventures in Good Eating. In 1952 colonel sanders got good start for his keep company and devoted the rest of his life in f ranchising business. By 1964, over six hundred franchised outlets were opened in theUnited StatesandCanadafor his chicken.The company got listed on the New York seam Exchange on January 16, 1969, only 3 years after it had gone public on borderland 17, 1966.Then on July 8, 1971 the company was taken over by Heublin Inc, for $285 cardinal dollars. Soon the company grew to an enormous triplet thousand and five hundred franchised and company-owned restaurants world-wide.But after being regularly travelling around the globe, Colonel Sanders died of leukemia at the age of 90 in 1980.Nowadays its part of a bigger company known as Yum Brands.Advantages To boot Business1. FinancialIt is another source of income through franchise fee and royalty. as well as there is profit in Cash flow, return on investment and profits. 2. OperationalThere is smaller of importized sustain as comp atomic spot 18d to developing and having locations by company itself. It also ensures consistency, enhan ced productivity and better quality. Self-motivation as franchisees invests their own money.3. StrategicIt helps in dividing risk by having multiple locations through peoples investment. That ensures faster network expansion and a better opportunity to focus on changing market needs.4. AdministrativeWith a smaller central arrangement, the business maintains a more cost effective labor force, no change in important staff members and better recruitment.Disadvantages To P arent Business1. Franchisor is required to brook enough resources to recruit, train and support the bracing franchisees.2. Franchisee may spoil the image of the company if he is not capable of running the franchise perfectly.3. Also franchisor has to tell all the internal in fixation of the company to the franchisee. So, privacy of company is also at risk. market/ AdvertisingThe KFC Marketing team focuses fervently on delivering an unvarying pipeline of mouth-watering meals. They try to pursuit the requires of t he customers and bring new innovative products to meet the customers standards. Target market is divided on the basis of demographic, geographical and psychographic segments. The pricing strategy that they follow while entering new market is price skimming. In jump they try to price their product a bit high and target the middle and upper category people. Than after some time they start lowering their prices to focus on middle to lower furcate people. They do this to get to larger part of the market.The Marketing team gives more importance to Operations and yield Excellence. They try to find new ways to develop and execute new ideas, as well as assessing the input of the finance in the business. The Marketing team is the primary medium of communication between the company and the customers. The budget of marketing is divided in accordance to the media buying and advertising production to guarantee a year round calendar of innovative news to drive consumers back to our restauran ts every time. Advertising strategies are the same as any other firm but they have their distinctive slogan riffle likin good which relates to quality of food they provide. KFC usually charges advertisement fee of 5% of the gross revenue to the man-to-man stores. KFC charges a Local advertising fee of 3% and fee equal to 2% of the gross revenue for national advertising fee.Operations ManagementKFC primary raw material is chicken. They are not brood in a normal way. These chickens are kept alive by tubes inserted into their bodies to force blood and nutrients skilful through their body. They do not have any beaks, feathers as well as feet. Their bone structure is considerably shrunk to get more meat out of them. This is beneficial for KFC because they do not have to dedicate a huge quantity for their production costs. There is rarely any plucking of feathers or the removal of the beaks and feet. that this method has been disapproved of by many animal rights organizations and has been upsetting the image of the company. There have been many cases against KFC regarding the handling of chickens in their farms. CostInitial Investnment ExpenditureLowHighInitial Franchise Fee$25,000$45,000 phylogeny Services FeeVariesVariesReal Property$400,000$1,000,000Construction and Leasehold Improvements$575,000$915,000Equipment/Signage$216,000$366,000Opening Advertising$5,000$5,000Opening Inventory$10,000$10,000 service Deposits and Business Licenses$7,000$7,000Initial Training$3,900$10,000Miscellaneous Opening Costs$5,000$15,000Additional Funds (3 months)$13,000$18,000Total$1,379,900$2,391,000The figures are taken from the KFC website. Please refer to the URLFINANCIAL ASSISTANCE The franchisor does not provide any mediate or direct financing. They do guarantee any lease or obligation. KFC is one of the parts of organization named YUM brands.YUM Capital is a special purpose limited liability company structured under Delaware law, the doctor member of which is YUM Capi tal Funding Corp a non-stock corporation in Delaware. YUM Capital issues commercial theme secured by loans purchased from YUM Capital Funding Corp and made by YUM Capital Funding Corp to franchisees in YUM restaurant brands.ROYALTY KFC franchisees have to pay royalty fee equal to 4% of gross revenues or else minimum of $600 per month. BREAK-EVEN POINT It is the condition of a company when they are having no profits. In other speech when company is just paying all its expenses. If it has to be calculated from sales than a certain number has to be found out at which company is having no profit. An estimated amount of sales revenue for 2010 is 21926 million dollars and the estimated revenue is 1452 million dollars.So break-even point should be the difference of sales and revenue i.e. 20474 (21926-1452) million dollars. This operator company has to earn At least 20474 million dollars to cover up all its expenses.Human vision ManagementKFC stresses upon the fact that either franchise es or at least one of the managers should complete the training platform set-up by the company. But KFC is very strict about asking for employees to complete the training process as per the companys discretion. Besides basic training if company has certain additional course work or programs they can ask the franchisee, managers and employees to do those too. The training program is generally of 4 days, each having a session of 8-10 hours each day. This kind of training technique helps in growing the efficiency of workers and managers and makes them accustomed with their work hence trim back the likelihood of errors and mistakes. But on the other hand this procedure can be time go through and can possibly become more costly due to the excessive training that the possible employees have to go through before entering the organization.Referenceshttp//www.kfc.com www.yumfranchise.com www.ehow.com www.yum.com KFC Annual report.www.answers.com Key TakeawayThis assignment helped in sympa thy different ways of managing a new business. It made me familiar with the concept of having a franchise business, what are the benefits of having franchise and what are the additional expenses of having a franchise business. Besides that it gave me an opportunity to review franchisees of KFC all over the world and helped me significantly in analyzing all the dynamics involved for having KFC franchise. In future if I want to start my own business I might give a preference to franchise form depending upon the kind of business I want to have.