What’s the difference between licensing and franchising?
The biggest difference is the cost of establishing and operating the
business. With a franchise, there is a significant franchise fee paid up
front and then ongoing royalties and advertising fees (see table
below). The parent company keeps very tight controls on every
aspect of your business but they also provide a lot of assistance in
the management and marketing of your store. With licensing, there is
a modest, one-time, licensing fee paid up front but there are no
royalties, and therefore, you do not have to report earnings to LFC.
business. With a franchise, there is a significant franchise fee paid up
front and then ongoing royalties and advertising fees (see table
below). The parent company keeps very tight controls on every
aspect of your business but they also provide a lot of assistance in
the management and marketing of your store. With licensing, there is
a modest, one-time, licensing fee paid up front but there are no
royalties, and therefore, you do not have to report earnings to LFC.
In a licensing arrangement, you have more freedom in the operation of your business than with a
franchising situation, but also more responsibility (there is also more risk and potential reward).
You have the freedom to set your own hours, charge whatever prices you want, co-brand with
whatever food you wish, offer whatever side dishes you prefer, set your own employment policies,
etc. The only requirements are that you purchase LFC ingredients (Seasoned Flour, Red Pepper
Mix, Dirty Rice Mix) and imprinted items (boxes, bags, and cups with the LFC logo printed on
them) through a designated LFC distributor. You must also make sure that your signs and
marketing materials meet trademark specifications. That’s all there is to it. It is, however, your
responsibility to know how to manage and market your restaurant business; LFC provides you
with the training necessary for you to produce a quality product but not how to run a business.
franchising situation, but also more responsibility (there is also more risk and potential reward).
You have the freedom to set your own hours, charge whatever prices you want, co-brand with
whatever food you wish, offer whatever side dishes you prefer, set your own employment policies,
etc. The only requirements are that you purchase LFC ingredients (Seasoned Flour, Red Pepper
Mix, Dirty Rice Mix) and imprinted items (boxes, bags, and cups with the LFC logo printed on
them) through a designated LFC distributor. You must also make sure that your signs and
marketing materials meet trademark specifications. That’s all there is to it. It is, however, your
responsibility to know how to manage and market your restaurant business; LFC provides you
with the training necessary for you to produce a quality product but not how to run a business.
Whereas some fast-food chicken franchises cost more than one million dollars to get into, a LFC
store costs as little as $150,000 to establish a planned restaurant, even less for an existing one.
This allows the “small guy” access to a successfully established product with a 30 year track
record. Our relatively low start-up expenses have attracted hard working entrepreneurs with
limited financial means, and because of this, 90% of LFC owners are minorities, whom many
have achieved a high level of financial success. LFC competes directly with the big names like
KFC, Popeyes and Churches; our highest volume stores are surrounded by these businesses.
store costs as little as $150,000 to establish a planned restaurant, even less for an existing one.
This allows the “small guy” access to a successfully established product with a 30 year track
record. Our relatively low start-up expenses have attracted hard working entrepreneurs with
limited financial means, and because of this, 90% of LFC owners are minorities, whom many
have achieved a high level of financial success. LFC competes directly with the big names like
KFC, Popeyes and Churches; our highest volume stores are surrounded by these businesses.
