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Yum! Brands 

“Market Cap $33.69 B As of May 2014

At a Glance

  • Industry: Restaurants
  • Founded: 1997
  • Country: United States
  • CEO: David Novak
  • Website: www.yum.com
  • Employees: 539,000
  • Sales: $13.08 B
  • Headquarters: Louisville, Kentucky

Forbes Lists

#673 Global 2000

  • #737 in Sales
  • #587 in Profit
  • #1946 in Assets
  • #310 in Market value

#41 Innovative Companies (#48 in 2012)

Profile

Yum! Brands, Inc. is a quick service restaurant company. The company operates its business through six operating segments: YUM Restaurants China, YUM Restaurants International, Taco Bell U.S., KFC U.S., Pizza Hut U.S. and YUM Restaurants India. It develops, operates, franchises and licenses a worldwide system of restaurants which prepare, package and sell a menu of competitively priced food items. The company’s each concept has proprietary menu items and emphasizes the preparation of food with various ingredients, as well as recipes and special seasonings to provide appealing and tasty food. Its traditional restaurants feature dine-in, carryout and drive-thru or delivery service. The company’s non-traditional units, which are principally licensed outlets, include express units and kiosks which have a more limited menu and operate in non-traditional locations, such as malls, airports, gasoline service stations, train stations, subways, convenience stores, stadiums, amusement parks and colleges. Yum! Brands was founded in 1997 and is headquartered in Louisville, KY.

“Yum! Brands History

Tricon Global

Yum! was created on May 30, 1997, as Tricon Global Restaurants, Inc. an independent company, as a result of a spin-out of the former fast food division of PepsiCo, which owned and franchised the KFC, Pizza Hut, and Taco Bell brands worldwide. Because of the company’s previous relationship with Pepsi, Yum! Brands has a lifetime contract with PepsiCo, with notable exceptions the contracts of franchisees such as HMSHost and college-operated Pizza Hut locations with Coca-Cola products that override Yum’s lifetime PepsiCo contract, along with some scattered KFC franchises across the United States which continue to maintain Coke fountain rights.

Expansion

In March 2002, Tricon announced the acquisition of Lexington, Kentucky-based Yorkshire Global Restaurants, owner of the Long John Silver’s and A&W Restaurants chains and its intention to change the company’s name to Yum! Brands, Inc. On May 16, 2002, the name change became effective after a vote during the company’s annual shareholders meeting, and on June 17, 2002, Yum! executed a two-for-one stock split. Shortly afterwards, due to Yum!’s lifetime contract with Pepsi, Long John Silver’s and A&W Restaurants (both of which previously served Coca-Cola products) began switching to Pepsi products, with A&W retaining A&W Root Beer from a separate deal with Dr Pepper Snapple Group.

In 2003, Yum! launched WingStreet as a hybrid combo unit with an existing Pizza Hut franchise

International growth

In January 2011, Yum! announced its intentions to divest itself of its Long John Silver’s and A&W brands to focus on its core brands of KFC, Pizza Hut and Taco Bell. For the decade leading up to the company’s announcement, major growth had relied on international expansion. With little presence outside North America, the two chains no longer fit in the company’s long-term growth plans. The foreign expansion—particularly that of Taco Bell, KFC and Pizza Hut—was cited in the firm’s January 18, 2011 announcement of its intention to sell the A&W and Long John Silver’s chains. Both of those chains also suffered from poor sales, and had fewer locations compared to the other chains in the Yum! Brands portfolio. In September 2011, Yum! announced they had found buyers for the A&W and LJS chains. A Great American Brand LLC will buy A&W, and LJS will be acquired by LJS Partners LLC. Yum! Brands had originally purchased the parent company of Long John Silver’s and A&W brands in 2003 for $320 million.

In May 2011, Yum! agreed to purchase mainland Chinese hot pot chain Little Sheep for HK$4.56 billion. The deal spent more than 4 months in anti-trust review by the Chinese Ministry of Commerce, to determine whether or not the transaction would result in a monopolistic positioning of Yum! in the country’s restaurant industry. The Ministry approved the deal in November 2011, according to Little Sheep representatives.

In 2012, KFC was the first American fast food restaurant to operate in the West Bank; it opened in Ramallah; a Pizza Hut is also planned.

In 2013, a few KFC locations in China supplied chicken found to contain “excess levels of chemical residue”. Yum! has lost 6% of sales from publicity in China as of January 25.

The company opened its first restaurant in Ulaanbaatar, Mongolia in May, 2013. For Mongolia, KFC is the first western fast food to open its doors in the country. The company is planning to open 15 more restaurants in Ulaanbaatar in the next 5 years, including the country’s first drive-thru service. Yum Brands also has opened Taco Bell and Pizza Hut restaurants in newer Target stores.

Yum! Brands opened its 40,000th store in Calangute, Goa, India in October 2013.

In the third quarter of 2013, Yum! Brands had to book an impairment of the goodwill resulting from the takeover of Little Sheep in 2011 in the amount of $222 million, which reduced profits for 2013.” 

*Information from Forbes.com and Wikipedia.org

**Video published on YouTube by “Interactive Media Lab