| Type | Public |
|---|---|
| Traded as | NYSE: YUM S&P 500 Component |
| Industry | Restaurant |
| Founded | 1997 as Tricon Global Restaurants, Inc. 2002 - rename, merger of Tricon and Yorkshire |
| Founder(s) | PepsiCo |
| Headquarters | Louisville, Kentucky, United States |
| Area served | Worldwide |
| Key people | David C. Novak (Chairman, President & CEO) Samuel Su (Vice Chairman) |
| Revenue | US$11.34 Billion (2010) |
| Operating income | US$1.77 Billion (2010) |
| Net income | US$1.16 Billion (2010) |
| Total assets | US$8.32 Billion (2010) |
| Total equity | US$1.58 Billion (2010) |
| Employees | 336,000 (as of December 2008) |
| Divisions | China |
| Subsidiaries | East Dawning KFC Pasta Bravo Pizza Hut Taco Bell WingStreet Yum Restaurant Services Group |
| Website | yum.com |
Yum! Brands, Inc. (NYSE: YUM) or Yum! is a United States-based Fortune 500 corporation. Yum! operates or licenses Taco Bell, KFC, Pizza Hut, and WingStreet restaurants worldwide.
Based in Louisville, Kentucky, it is the world's largest fast food restaurant company in terms of system units—nearly 38,000 restaurants around the world in more than 110 countries and territories.[1] In 2010, Yum!'s global sales totaled more than US$11 billion.
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Yum! was created on October 7, 1997, as Tricon Global Restaurants, Inc. an independent company, as a result of a spin-out from 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 being the contract of A&W Restaurants with Dr Pepper Snapple Group to be the exclusive restaurant provider of A&W Root Beer, and the contracts of franchisees such as HMSHost and college-operated locations with Coca-Cola which override Yum's lifetime PepsiCo contract, along with some scattered KFC franchises across the United States which continue to maintain Coke fountain rights.
In March 2002, Tricon announced the acquisition of Lexington, Kentucky-based Yorkshire Global Restaurants, owner of the Long John Silver's and A&W All-American Food 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) switched to Pepsi products once their franchise contracts expired, 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.[2] The Pasta Bravo concept was acquired in 2003 from Pasta Bravo, Inc. of Aliso Viejo, Calif for $5 million to pair with Pizza Hut.[3] An East Dawning test cafeteria-style restaurant was opened in Shanghai in 2004. After failing, Yum! Brands chose the KFC business model (KFC is the most successful Western chain in China) and found greater success.[4]
As of year-end 2010, more than 20 East Dawning restaurants were in operation.[5] In 2007 and 2008, a thousand WingStreet stores a year were opened. On October 19, 2009, Company president Scott Bergren publicized WingStreet's national launch.[2]
The growth of Yum! Brands throughout the United States has slowed from its previous rapid expansion because the chain has saturated most of the domestic market. The future growth of Yum! Brands is targeted mainly at other countries; China in particular has a large population and is enjoying increases in income.[6]
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 the US and Canada, the two chains no longer fit in the company's long-term growth plans.[7] 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.[8] Yum! Brands had originally purchased the parent company of Long John Silver's and A&W brands in 2003 for $320 million.[8]
In May 2011, Yum agreed to purchase mainland Chinese hotpot chain Little Sheep for HK$4.56 billion.[9] 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.[10]
The current chairman and chief executive officer of Yum! Brands is David C. Novak. Novak is a director of J.P. Morgan Chase and became CEO of predecessor firm Tricon Global on January 1, 2000, and chairman of the board on January 1, 2001. He is also a member of the Yum! executive/finance committee.
Since 2006, Yum! Brands has served as the corporate sponsor of the Kentucky Derby.[11]
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