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Yum! Brands

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Yum! Brands, Inc.
Company typePublic (Spin out)
NYSE: YUM
S&P 500 Component
IndustryRestaurants
Founded1997 as Tricon Global Restaurants, Inc.
2002 – rename
Headquarters
Louisville, Kentucky
,
United States
Area served
Worldwide
Key people
David C. Novak
(Executive Chairman)
Greg Creed
(CEO)
Patrick J. Grismer
(CFO)
RevenueDecrease US$13.084 Billion (2013)[1]
Decrease US$1.798 Billion (2013)[1]
Decrease US$1.091 Billion (2013)[1]
Total assets
  • Decrease US$ 8.695 billion (2013) [2]
Total equityDecrease US$2.229 Billion (2013)[1]
Number of employees
approximately 539,000 (as of December 2013)[1]
DivisionsChina, India
SubsidiariesKFC
Pizza Hut
Taco Bell
WingStreet
Yum! Restaurants International
Yum! Restaurants China
Websitewww.yum.com

Yum! Brands, Inc., or Yum!, is an American fast food company. A Fortune 500 corporation, Yum operates the licensed brands Taco Bell, KFC, Pizza Hut, and WingStreet worldwide. Prior to 2011, Yum! also owned Long John Silver's and A&W Restaurants.

Based in Louisville, Kentucky, it is the world's largest fast food restaurant company in terms of system units—more than 41,000 restaurants around the world in over 125 countries.[3] In 2014, Yum!'s global sales totaled more than US$13 billion.

History

Tricon Global

Yum! was created on May 30, 1997,[4] as Tricon Global Restaurants, Inc., an independent company resulting from the spin-out of PepsiCo's former fast food division, which owned and franchised the KFC, Pizza Hut and Taco Bell brands worldwide. Because of the company's previous relationship with Pepsi, Yum! Brands holds a lifetime contract with PepsiCo;[citation needed] notable exceptions include franchisees such as HMSHost and college-operated Pizza Hut locations, which serve Coca-Cola products that override Yum's PepsiCo contract, along with scattered KFC franchises across the United States that 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 Restaurants retaining A&W Root Beer from a separate deal with Dr Pepper/Seven Up (now Dr Pepper Snapple Group ).

In 2003, Yum! launched WingStreet as a hybrid combo unit with an existing Pizza Hut franchise.[5]

International growth

A single Yum! restaurant facility co-branded as Taco Bell and KFC in San Francisco, California
Another cobranded KFC and Taco Bell in Oscoda, Michigan.

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.[6] 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.[7] Yum! Brands had originally purchased the parent company of Long John Silver's and A&W brands in 2003 for $320 million.[7]

In May 2011, Yum! agreed to purchase mainland Chinese hot pot chain Little Sheep for HK$4.56 billion.[8] 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.[9]

In 2012, a KFC opened in Ramallah and became the first American fast food restaurant to operate in the West Bank; a Pizza Hut is also planned.[10]

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.[11]

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.[12] Yum Brands has also 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.[13]

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.

Corporate

Yum! owns naming rights to Louisville's largest arena, the KFC Yum! Center

The current executive chairman of Yum! Brands is David C. Novak.[14] Novak became CEO of predecessor firm Tricon Global on January 1, 2000, and chairman of the board on January 1, 2001.[15] Greg Creed replaced Novak in his role as CEO on January 1, 2015.[16]

Since 2006, Yum! Brands has served as the corporate sponsor of the Kentucky Derby.[17]

Brands

Current

Former

  • A&W Restaurants - sold to a consortium of A&W franchisees, through A Great American Brand LLC 2011
  • Long John Silver's - sold to Long John Silver's franchisees and other private investors 2011
  • Pasta Bravo - last locations closed in 2011
  • Hot 'n Now - 1990 it was acquired by PepsiCo, which placed operations under the Taco Bell branch. Now mostly defunct, with only 5 of 150 restaurants remain

See also

Notes

  1. ^ a b c d e "Yum! Brands, Annual Report 2013" (PDF). yum.com. Retrieved July 5, 2014.
  2. ^ "YUM BRANDS INC 2013 Annual Report Form (10-K)" (XBRL). United States Securities and Exchange Commission. February 18, 2014.
  3. ^ http://www.yum.com/company/
  4. ^ "Yum! Brands Inc (YUM) Company Profile". Reuters. Retrieved 2014-10-03.
  5. ^ Cyrek, Christopher (October 20, 2009). "Pizza Hut going after wings market". Dallas Business Journal. Dallas, Texas: American City Business Journals, Inc. Retrieved 2011-01-26.
  6. ^ "Yum puts A&W, Long John Silver's up for sale". MSNBC. Associated Press. 18 January 2011. Retrieved 20 January 2011.
  7. ^ a b "Yum Sells 2 Fast-Food Chains". New York Times. 2011-09-22.
  8. ^ http://www.thechinaperspective.com/articles/uncertaintysurf-8863/
  9. ^ http://www.thechinaperspective.com/articles/chinacorporaten-8897/
  10. ^ American fried chicken comes to the Palestinian territories, Los Angeles Times, 04-02-2012, access date 20-02-2012
  11. ^ "Yum Brands' chicken in China contained excessive chemical levels, report says". Business First. 25 January 2013. Retrieved 26 January 2013.
  12. ^ "Yum! Brands expands to Mongolia, plans more growth". Business First. 29 May 2013. Retrieved 30 May 2013.
  13. ^ Narayan, Adi (October 23, 2013). "Yum to Invest $10 Billion With Partners in Emerging Markets Push". Bloomberg. Retrieved 19 November 2013.
  14. ^ "Yum! Brands, Form 8-K, Current Report, Filing Date Feb 10, 2000". secdatabase.com. Retrieved Feb 16, 2013.
  15. ^ "Yum! Brands, Form 10-K, Annual Report, Filing Date Mar 28, 2001" (PDF). secdatabase.com. Retrieved Feb 16, 2013.
  16. ^ Company Management 2015
  17. ^ Kentucky Derby including Yum Brands in its name – May 5, 2006
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