Tuesday, February 27, 2007

KFC Earns

How Much does KFC Make out of your hunger?

  • 1USD = 44.20 Indian Rupees (INR)
  • Rs. Implies INR in all discussion below.
  • 10 grams Gold worth Rs. 9728 in India
  • Per capita income in India = USD 705
  • Rs. 100, 000 can buy a YEAR of decent living, children education and basic entertainment in an average Indian family of four members.

In KFC (Kentucky Fried Chicken) one fine evening, in Kolkata February 24, 2007 Saturday I had a light dinner and made a guestimate* of how much the owner of one of such store can earn.


Location: City Center, Kolkata

Min. Priced food: Rs. 75
(Only two items in this category, most of them lie in a range of Rs. 100 to Rs. 200.)

Floor Area: 30 x 30 Square Feet.

Employees: 12 (5 waiters, 2 Counter Boys, 1 welcome girl, Assuming 4 cook)

Average Number of customer at any instance: 40


  1. One customer spends one hour in the restaurant which is a far long time because usually people come in group of 3 in average.
    Which makes 20 minutes per customer but here we are calculating worst case income.

  2. Employees are paid Rs. 10,000 per month for 5 hr/day 7 days a week.

  3. Total cost on food includes cost of raw material, storage cost, cost of cooking aids (Gas, water, power etc.) and depreciation cost of cooking aids.
    It is assumed 50% of sale price of food.

  4. Operation hours: 5 hrs/ day 30 days a month.

  5. Rental, security, insurance, advertisement, public relation cost: Rs. 125, 000.

  6. verage money spent per person per visit: Rs. 100.

Calculations (per month):

Total Revenue:

Total customers x Average order price = 50x5x30 x 100 = Rs.750, 000.

Total Income after removing cost incurred in converting raw material into edible food:

Total Revenue x (1- fraction of food cost) = 750, 000 – (1- 0.5) = Rs. 375, 000

Total Profit:

Total Income – Salary Payment – Rental etc. cost

= 375, 000 – 120, 000 – 125, 000

= Rs.130, 000 per month

Worst case profit:

Yet the calculation itself was made too tight to leave a space for any further deduction, in worst case the profit is assumed to be 75% of calculated profit.

0.75 x 130, 000 = Rs. 97, 500 per month

Best Case Profit:

1.50 x 130, 000 = Rs. 195, 000 per month

* Guestimate = Guess + Estimate.

In guestimate I observe and try to calculate some facts in a rough manner. This process includes basic observation, rough idea of processes involved in final estimation and nano amount of common sense to keep things in-bound.

There is absolutely zero reliability of this information, please don’t start putting this data as a fact but if you do so please be ready to logically explain each assumptions that are being made in calculation.

Genre: Guestimate
Type: Personal View
Language: English
Category: For ALL age group
Place and Time: IIT Kharagpur. February 27, 2007. 02:01 in afternoon.

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