Although we're not NIC anymore, I thought I would chime in with our process...
Generally, if a group is interested in becoming a colony (and later a chapter), they will get in touch with someone at the Fraternity's international offices. A regional officer will be sent to meet the interested men and decide whether there is potential for a chapter. The officer will then help with recruitment - I think that 25 is the magic number for getting things going.
There's a process to chartering, with a number of goals and achievements that must be met before gaining chapter status.
This is a link to more information:
http://www.kappasigma.org/startChapterHow.php?ref=start
James could probably provide more info, as he is a founding father of a Kappa Sig chapter.