KOA Franchise in 2024: Costs, Fee & FDD

KOA, or Kampgrounds of America, is one of the most recognized names in the outdoor hospitality industry, founded in 1962 by Dave Drum. With a mission to provide high-quality camping experiences across North America, KOA has grown into a leader in the camping and RV industry. Their bright yellow signs have become synonymous with family-friendly camping, comfort, and convenience, making them a trusted brand for travelers seeking outdoor adventures.

KOA’s core services revolve around offering various types of accommodations, including tent sites, RV hookups, and cabins, catering to a wide range of outdoor enthusiasts. Many KOA locations also provide ancillary services like swimming pools, playgrounds, and organized activities for families, ensuring that all age groups have an enjoyable stay. Their primary customer base includes families, couples, and retirees seeking relaxing, outdoor vacations.

Currently, KOA operates over 500 locations across the U.S. and Canada, making it one of the largest networks of privately-owned campgrounds in North America. With millions of campers staying at KOA sites each year, the brand serves as a go-to destination for both novice and experienced campers. Their presence in two countries provides a large customer base, with new locations continuously opening to meet growing demand.

KOA offers franchisees strong support, including comprehensive training programs that cover campground management, marketing, and customer service. In addition to a recognizable brand name, franchisees benefit from ongoing operational support, access to marketing resources, and industry insights to help grow their businesses. KOA’s established franchise system ensures that franchisees can focus on delivering top-notch experiences to their guests while building a thriving business.

KOA Franchise Insights

1. KOA operates over 400 campgrounds across North America, serving millions of campers annually, making it the largest franchise in the outdoor hospitality industry.
2. KOA’s brand is synonymous with quality camping, making it a trusted choice for travelers seeking consistent and enjoyable outdoor experiences.
3. The franchise offers flexibility in services, allowing franchisees to adapt their offerings based on their location, from rustic camping to more luxurious glamping options.
4. KOA’s strong customer loyalty is driven by its focus on family-friendly amenities, organized activities, and a sense of community, which keeps campers returning year after year.
5. With decades of experience, KOA provides franchisees with a well-established system that includes operational support, training, and marketing resources to help them succeed.

KOA Franchise Key indicators

How much does it cost to open a KOA franchise?

Understanding the potential investment size and capital requirements is crucial when considering opening a KOA franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.

Min & Max Investment

Opening a KOA franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a KOA below from the most recent Item 7 below:

Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.

Required Capital

To open a KOA (Kampgrounds of America) franchise, the required capital involves both the initial investment costs and a net worth requirement set by KOA. Let’s take a closer look below:

• Initial Investment The total estimated initial investment for a KOA franchise typically ranges from $441,000 to $15.17 million. This includes costs for acquiring or leasing land, construction or renovation of facilities, equipment, and operating costs. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
• Liquid Assets Requirement While KOA doesn’t publicly state a specific amount, similar franchises in the hospitality industry often require franchisees to have at least $250,000 to $500,000 in liquid assets to cover initial operational costs and ensure financial stability during the setup phase.
• Net Worth Requirement Although the exact net worth requirement can vary, it’s estimated that KOA would require franchisees to have a net worth of at least $1 million to ensure they have the financial strength to support the business long-term. This includes assets like real estate, investments, and personal property, minus any liabilities.

These estimates give a good sense of the financial commitment required to open a KOA franchise.

How much does a KOA franchise owner make?

Calculating the salary of a KOA franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a KOA franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.

KOA Revenue & Gross Sales

Based on the most recent analysis, KOA franchises achieved a median gross sales of $752,000, reflecting strong consumer demand for outdoor and camping experiences. This financial performance highlights the franchise’s ability to generate significant revenue by capitalizing on the growing interest in outdoor recreation and family-friendly travel options.

Which key factors impact the average revenue performance of KOA franchisees?

Several factors likely contributed to the strong performance of KOA franchisees’ median gross sales in the past year. The growing interest in outdoor recreation and camping, especially following the pandemic, has driven more Americans to seek vacation alternatives closer to home, which has benefited KOA locations. Additionally, the rising popularity of RV travel, combined with the increased demand for socially distanced vacation options, has boosted campground occupancy rates. KOA’s flexibility in offering various camping experiences, from traditional tent camping to glamping and RV accommodations, has also attracted a broader customer base, leading to higher sales compared to the prior year.

KOA Franchise Operational Costs

When opening a KOA franchise, it’s important to consider the range of operational costs that will keep the business running smoothly and ensure that guests have a positive experience. These costs go beyond standard franchise fees, focusing on the day-to-day expenses that come with managing a campground and offering a variety of services to campers.

• Property Maintenance Regular upkeep of the grounds, cabins, RV sites, restrooms, and recreational areas to maintain a high standard for guests.
• Utilities Costs for water, electricity, internet, and waste management, which are vital to the comfort of campers and the operation of the facility.
• Staffing Costs Wages, benefits, and training for campground staff, including groundskeepers, front desk staff, and activity coordinators.
• Insurance Liability and property insurance to protect against potential risks associated with running an outdoor facility and ensuring guest safety.
• Equipment Maintenance Regular care and servicing of campground equipment, including RV hookups, recreational gear, and common area facilities.
• Supplies and Inventory Stocking and restocking items for the camp store, cleaning supplies, and guest necessities like firewood and propane.

By staying on top of these ongoing costs, you’ll ensure your KOA franchise remains efficient, guest-friendly, and profitable. Proper budgeting and planning will help you maintain high operational standards while keeping the campground running smoothly year-round.

KOA Franchise Fees

When opening a KOA franchise, it’s essential to understand the ongoing fees that will impact your financial planning. These fees cover essential services provided by the franchisor, ensuring brand support and visibility for your campground. Here’s a breakdown of the most relevant ongoing fees:

• Royalty Fee You are required to pay 8% of your Total Registration Receipts on the first day of each week. This includes revenue from campsite rentals, activity fees, no-shows, and other services, excluding sales tax and utility charges. Payments are made through Electronic Funds Transfer (EFT).
• Advertising Assessment KOA charges 2% of Total Registration Receipts for advertising purposes. This fee supports national marketing efforts that help promote the KOA brand and drive traffic to your location.
• Additional Fees Depending on your specific campground and services, there might be additional fees related to specialized support, optional programs, or site-specific upgrades.

Understanding these fees is crucial for managing your KOA franchise’s financial health and ensuring your business remains aligned with the brand’s marketing and operational standards.

KOA Franchise Earnings

For a KOA franchise, the median gross sales stand at $752,000, reflecting strong demand for outdoor camping and RV accommodations. This figure highlights the revenue potential for franchisees, particularly in locations with high tourist activity or during peak camping seasons. The appeal of KOA’s brand, combined with its broad range of services, allows franchisees to attract diverse customers, from families to retirees seeking outdoor experiences.

As an owner-operator, potential earnings can reach $135,000, showcasing a solid return potential. This earnings figure considers the costs of staffing, property maintenance, and operational expenses. By actively managing the business, owner-operators can enhance profitability by controlling daily operations, engaging with guests, and optimizing services for repeat customers. Overall, KOA’s combination of brand recognition and recurring revenue streams offers franchisees a promising opportunity in the outdoor hospitality sector.

How to Open a KOA Franchise

Becoming a KOA franchisee involves a series of steps designed to ensure you’re fully prepared for the investment and operational aspects of running a successful campground. Here’s an overview of the process, from initial inquiry to starting operations:

1. Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
2. Application and Review KOA will evaluate your application, looking into your financial qualifications, business experience, and overall suitability. You’ll need to demonstrate the necessary capital, liquid assets, and net worth to move forward.
3. Discovery Day If you meet the requirements, you’ll be invited to a Discovery Day at KOA’s headquarters. This is an opportunity to meet the team, tour facilities, and gain a deeper understanding of the business model and franchise support.
4. Franchise Agreement After Discovery Day, if both parties agree to proceed, you’ll review and sign the Franchise Disclosure Document (FDD) and the franchise agreement, formalizing your commitment.
5. Site Selection and Financing KOA assists you in selecting the ideal campground location, whether you’re purchasing an existing campground or developing a new site. Securing financing to cover initial investment costs is crucial at this stage.
6. Training and Setup You’ll participate in KOA’s comprehensive training program, covering everything from campground management to customer service. Meanwhile, KOA will help you with equipment setup, branding, and final preparations.
7. Grand Opening Once your campground is ready, KOA provides ongoing support to help with the grand opening and ensure your operations are running smoothly from day one.

Pros & Cons

Pros

Strong Brand Recognition: KOA is a trusted, well-known name in the outdoor hospitality industry, which can help attract a consistent flow of campers and travelers.

Booming Industry: The outdoor camping and RV industry has seen significant growth, and KOA’s broad customer base taps into the increasing trend of outdoor vacations.

Flexible Business Model: Franchisees can offer a variety of accommodations and services, from tent camping to luxury cabins, allowing you to tailor the experience to your market.

Cons

High Initial Investment: Setting up a campground can require significant upfront capital, particularly for acquiring or developing land and facilities.

Seasonality: Depending on location, your business might face seasonal fluctuations, with slower periods during off-peak camping seasons.

Operational Complexity: Managing a campground requires handling diverse operational aspects, including property maintenance, staffing, and guest services, which can be labor-intensive.

Competition: The outdoor hospitality market is competitive, with local campgrounds and alternative lodging options posing potential challenges to your business.