Discuss Company Profile of Yum! Brands, Inc. within the Company Profiles & News !! forums, part of the Mirror View - Ebooks Links & Miscellenous Reading Material category; Yum! Brands, Inc. (NYSE: YUM) or Yum! is a United States-based Fortune 500 corporation. Yum! operates or licenses Taco Bell, ...
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Company Profile of Yum! Brands, Inc.
Company Profile of Yum! Brands, Inc. - May 14th, 2011
Yum! Brands, Inc. (NYSE: YUM) or Yum! is a United States-based Fortune 500 corporation. Yum! operates or licenses Taco Bell, KFC, Pizza Hut, WingStreet, and Long John Silver's restaurants worldwide, and A&W Restaurants (excluding A&W in Canada).
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. In 2010, Yum!'s global sales totaled more than US$11 billion.
Yum! Brands Inc. operates the Taco Bell, Pizza Hut, KFC, Long John Silver's, and A&W chains. The company is the largest quick-service restaurant concern in the world in terms of units with approximately 33,000 locations in over 100 countries across the globe. Taco Bell, Pizza Hut, and KFC were part of PepsiCo Inc.'s restaurant group until 1997, when they were spun off as Tricon Global Restaurants Inc. Tricon changed its name to Yum! in 2002, the same year that Long John Silver's and A&W were added to its holdings.
YUM! Brands, Inc. (YUM), incorporated in 1997, is a quick service restaurant (QSR) company, with more than 37,000 units in more than 110 countries and territories. YUM through its five concepts of KFC, Pizza Hut, Taco Bell, Long John Silver’s (LJS) and A&W All-American Food Restaurants (A&W) (the Concepts), the Company develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of competitively priced food items.
Units are operated by a Concept or by independent franchisees or licensees under the terms of franchise or license agreements. In addition, the Company owns non-controlling interests in entities in China who operate similar to franchisees of KFC and a non-controlling interest in Little Sheep, a Hot Pot concept. Through its Concepts, YUM develops, operates, franchises and licenses a worldwide system of both traditional and non-traditional QSR restaurants.
During the fiscal year ended December 25, 2010 (fiscal 2010), YUM had approximately 20,000 system restaurants in the United States. The International Division, based in Dallas, Texas, consists of approximately 14,000 system restaurants, primarily KFCs and Pizza Huts, operating in over 110 countries outside the United States. The China Division, based in Shanghai, China, comprises approximately 4,000 system restaurants in China, primarily KFCs and Pizza Huts. In addition, Taco Bell, KFC, LJS and A&W offer a drive-thru option in many stores. Pizza Hut offers a drive-thru option on a much more limited basis. Pizza Hut and KFC offers delivery service. The Company and its franchisees also operate multi-brand units, primarily in the United States, where two or more of the concepts are operated in a single unit.
As of December 25, 2010, KFC operated in 110 countries and territories throughout the world and also had 5,055 units in the United States, and 11,798 units outside the United States, including 3,244 units in China. Approximately 15% of the United States units and 29% of the non-United States units are concept-owned. Traditional KFC restaurants in the United States offers fried and non-fried chicken-on-the-bone products, primarily marketed under the names Original Recipe, Extra Tasty Crispy and Kentucky Grilled Chicken. Other principal entree items include chicken sandwiches (including the Snacker and the Twister), KFC Famous Bowls, Colonel’s Crispy Strips, Wings, Popcorn Chicken and seasonally, Chunky Chicken Pot Pies. KFC restaurants in the United States also offers a variety of side items, such as biscuits, mashed potatoes and gravy, coleslaw, corn, and potato wedges, as well as desserts. While many of these products are offered outside of the United States, international menus are more focused on chicken sandwiches and Colonel’s Crispy Strips, and include side items that are suited to local preferences and tastes. Restaurant decor throughout the world is characterized by the image of the Colonel.
As of December 25, 2010, Pizza Hut operated in 95 countries and territories throughout the world. As of December 25, 2010, Pizza Hut had 7,542 units in the United States, and 5,890 units outside of the United States. Approximately 6% of the United States units and 22% of the non-United States units are concept-owned. Pizza Hut features a variety of pizzas, which may include Pan Pizza, Thin ‘n Crispy, Hand Tossed, Sicilian, Stuffed Crust, Twisted Crust, Sicilian Lasagna Pizza, Cheesy Bites Pizza, The Big New Yorker, The Big Italy, The Insider, The Chicago Dish, the Natural, Pizza Mia and 4forALL. Each of these pizzas is offered with a variety of different toppings. Pizza Hut also offers a variety of Tuscani Pastas. Menu items outside of the United States are generally similar to those offered in the United States, though pizza toppings are often suited to local preferences and tastes. Many Pizza Huts offer chicken wings, including over 3,000 stores offering wings under the brand WingStreet, primarily in the United States.
As of December 25, 2010, Taco Bell operated in 21 countries and territories throughout the world. As of December 31, 2010, there were 5,634 Taco Bell units in the United States, and 262 units outside of the United States. Approximately 22% of the United States units and 1% of the non-United States units are concept-owned. Taco Bell specializes in Mexican-style food products, including various types of tacos, burritos, gorditas, chalupas, quesadillas, taquitos, salads, nachos and other related items. Additionally, entree items include Grilled Stuft Burritos and Border Bowls. Taco Bell units feature a bell logo on their signage.
As of December 25, 2010, LJS operated in four countries and territories throughout the world. As of December 25, 2010, there were 964 LJS units in the United States, and 31 units outside the United States. All single-brand units inside and outside of the United States are operated by franchisees or licensees. As of December 25, 2010, there were 86 concept-owned multi-brand units that included the LJS concept. LJS features a variety of seafood and chicken items, including meals featuring batter-dipped fish, chicken and shrimp, non-fried salmon, shrimp and tilapia, hushpuppies and portable snack items. LJS units typically feature a seaside/nautical theme.
As of December 25, 2010, A&W operated in nine countries and territories throughout the world. As of December 25, 2010, there were 322 A&W units in the United States, and 317 units outside the U.S. As of December 25, 2010, all units were operated by franchisees. A&W serves A&W draft Root Beer and signatures A&W Root Beer float, as well as hot dogs and hamburgers.
As Tricon management worked to position itself as the leading operator in quick-service industry, it faced several challenges. Ameriserve Food Distribution Inc., its main supplier, declared bankruptcy in January 2000. The problem was soon resolved, however, when McLane Company Inc. agreed to buy the faltering company in November 2000. Tricon was also pushed to shelve its successful advertising campaign featuring a talking Chihuahua in 1999 after Taco Bell franchisees demanded that future commercials tout the company's fresh food. Prompted by faltering sales, the firm launched its "Think Outside the Bun" slogan in an attempt to lure customers to its new, fresher products. At the same time, two men filed suit against chain claiming the firm stole their advertising idea for the talking Chihuahua. In 2003, a federal jury awarded $30.1 million to the two men. Taco Bell planned to appeal the verdict.
During 2002, Tricon added Long John Silver's Restaurants Inc. and A&W Restaurants Inc. to its holdings in a $320 million deal with Yorkshire Global Restaurants Inc. The company changed its name to Yum! Brands Inc. that year, reflecting the company's shift to a multi-branding strategy. Nearly 2,000 company restaurants were multi-branded units, offering customers a choice of either Taco Bell and KFC or Taco Bell and Pizza Hut at one location. With the purchase of Long John Silver's and A&W, YUM! planned to aggressively pursue additional multi-branding strategies. In 2003, the company acquired the rights to the Pasta Bravo brand and planned to pair it with Pizza Hut.
YUM! also focused on international expansion, eyeing China, the United Kingdom, Mexico, and Korea as key growth markets. KFC had become China's leading brand, opening the country's first drive-thru in Beijing in 2002. Overall, there were 800 KFCs and 100 Pizza Huts in China, and during 2003 Taco Bell made its debut. A&W also experienced a first--it went international with the establishment of a restaurant in Hanover, Germany.
While exposure in the international arena was crucial to the future growth of Yum!, its presence in certain areas left it subject to criticism and violence. A KFC in Pakistan was set on fire by an angry mob protesting the U.S. bombing of Afghanistan in 2001. In June 2003, chairman and CEO David Novak became the target of a demonstration held by the People for the Ethical Treatment of Animals (PETA) in Germany. PETA had recently launched a campaign against KFC and Yum! claiming that the animals purchased for its restaurants were abused and treated in an inhumane fashion. A protestor at a KFC took PETA's actions a step further and soaked Novak with fake blood and feathers.
Nevertheless, Yum! remained dedicated to international expansion as well as its multi-branding strategy and customer service goals. Under Novak's direction, the company planned to open 1,000 new international units per year and at least 400 multi-branded units in the United States each year. While domestic competition remained fierce in the early years of the new century, Yum! appeared to be on track for significant growth in the years to come.
Principal Subsidiaries: Pizza Hut Inc.; Taco Bell Corporation; KFC Corporation; Long John Silver's Restaurants Inc.; A&W Restaurants Inc.
Principal Competitors: AFC Enterprises Inc.; Doctor's Associates Inc. (Subway); McDonald's Corporation.
Market Cap (Mil.): $25,540.96
Shares Outstanding (Mil.): 465.57
Annual Dividend: 1.00
Yield (%): 1.82
YUM Industry Sector
P/E (TTM): 22.56 27.89 21.66
EPS (TTM): 7.69 -- --
ROI: 20.81 8.87 1.89
ROE: 83.58 10.96 2.88
Incorporated: 1997 as Tricon Global Restaurants Inc.
Sales: $7.7 billion (2002)
Stock Exchanges: New York
Ticker Symbol: YUM
NAIC: 722211 Limited-Service Restaurants
1952: Harland Sanders establishes his first franchise.
1958: Pizza Hut is founded by brothers Dan and Frank Carney.
1962: The first Taco Bell location opens.
1977: PepsiCo purchases Pizza Hut.
1978: PepsiCo acquires the Taco Bell chain.
1986: Kentucky Fried Chicken is added to PepsiCo's arsenal.
1997: PepsiCo spins off its restaurant holdings as Tricon Global Restaurants Inc.
2002: Tricon changes its name to Yum! Brands Inc.; the company acquires Long John Silver's and A&W All American Food Restaurants.
Name Age Since Current Position
David Novak 58 2001 Chairman of the Board, President, Chief Executive Officer
Jing-Shyh Su 58 2010 Vice Chairman of the Board, Chairman and Chief Executive Officer - YUM Restaurants China
Richard Carucci 53 2005 Chief Financial Officer
Graham Allan 55 2010 Chief Executive Officer - YUM Restaurants International
Greg Creed 53 2011 Chief Executive Officer - Taco Bell
Scott Bergren 64 2011 Chief Executive Officer of Pizza Hut U.S. and YUM Innovation
Roger Eaton 50 2011 Chief Executive Officer of KFC U.S. and YUM Operational Excellence
Muktesh Pant 56 2010 President - YUM Restaurants International and President - Global Branding
Emil Brolick 63 2010 Chief Operating Officer and President - Long John Silver & A&W All American Food Restaurants
Christian Campbell 60 2003 Senior Vice President, General Counsel, Secretary, Chief Franchise Policy Officer
Jonathan Blum 52 1997 Senior Vice President, Chief Public Affairs Officer
Ted Knopf 59 2005 Senior Vice President - Finance, Corporate Controller
Anne Byerlein 52 2002 Chief People Officer
Robert Holland 70 1997 Independent Director
Massimo Ferragamo 53 1997 Independent Director
Kenneth Langone 75 1997 Independent Director
Thomas Ryan 58 2002 Independent Director
J. David Grissom 72 2003 Independent Director
Bonnie Hill 69 2003 Independent Director
David Dorman 57 2005 Independent Director
Jonathan Linen 67 2005 Independent Director
Thomas Nelson 48 2006 Independent Director
Robert Walter 65 2008 Independent Director
1441 Gardiner Lane
Louisville, Kentucky 40213
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