Yum! Brands

Yum! Brands, Inc.
Formerly
 Tricon Global Restaurants (1997–2002)
Public
Traded as NYSE: YUM
S&P 500 Component
Industry Restaurants
Founded May 30, 1997
Headquarters Louisville, Kentucky, U.S.
Area served
 Worldwide
Key people
Revenue Decrease US$6.366 billion (2016)[1]
Increase US$1.625 billion (2016)[1]
Decrease US$1.619 billion (2016)[1]
Total assets
  • Decrease US$5.478 billion (2016)[1]
Total equity Increase US$5.656 billion (2016)[1]
Number of employees
 Approximately 90,000 (as of December 2016)[2]
Subsidiaries
Website www.yum.com

Yum! Brands, Inc., or Yum! and formerly Tricon Global Restaurants, Inc., is an American fast food company. A Fortune 500 corporation, Yum! operates the brands Taco Bell, KFC, Pizza Hut, and WingStreet worldwide, except in China, where the brands are operated by a separate company, Yum China.[3] Prior to 2011, Yum! owned Long John Silver's and A&W Restaurants.[4]

Based in Louisville, Kentucky, it is one of the world's largest fast food restaurant companies in terms of system units—with 45,084 restaurants (including 1,481 that are company-owned and 43,603 that are franchised) around the world in over 135 countries and territories.[3]

History

Tricon Global Restaurants

Yum! was created on May 30, 1997, as Tricon Global Restaurants, Inc.[5] from PepsiCo's fast food division as the parent corporation of KFC, Pizza Hut and Taco Bell restaurant companies.[6][7][8] Tricon Global was spun out in October 1997.[9] Tricon selected Louisville as its headquarters, moving near the KFC Restaurant Support Center from the Pepsi HQ in Purchase, New York, by early 1998.[10][8]

In 2000, Tricon Global agreed to test multi-branded locations with Lexington, Kentucky-based Yorkshire Global Restaurants, owner of the Long John Silver's and A&W chains.[11] By March 2002, the Tricon-Yorkshire multibranding test consisted of 83 KFC/A&Ws, six KFC/Long John Silver's and three Taco Bell/Long John Silver's and was considered successful by the companies.[12]

In 2001, KFC started test restaurants in Austin, Texas, called "Wing Works", which is a chicken wing line sold with one of a few flavored sauces. Also, KFC hired a consultant to develop a breakfast menu.[13]

Yum! Brands

In March 2002, Tricon announced the acquisition of Yorkshire and its intention to change the company's name to Yum! Brands, Inc. to match its NYSE ticker symbol.[12] The name change became effective after a vote during the company's annual shareholders meeting by May 22, 2002[14][15] while the acquisition was finalized on May 8th. On June 6, 2002, Yum! executed a two-for-one stock split.[16][17] Shortly afterwards, due to Yum!'s lifetime contract with Pepsi, Long John Silver's and A&W (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 2002, Yum! began testing co-branding locations pairing Pizza Hut with Pasta Bravo, Back Yard Burgers and A&W.[18] The Pasta Bravo concept was acquired in 2003 from Pasta Bravo, Inc. of Aliso Viejo, California for $5 million to pair with Pizza Hut.[19][20]

In 2003, Yum! launched WingStreet as a hybrid combo unit with an existing Pizza Hut franchise.[21][22] In 2007 and 2008, a thousand WingStreet stores a year were opened.[22] An East Dawning test cafeteria-style restaurant was opened in Shanghai in 2004. After initially failing, Yum! Brands chose the KFC business model (KFC is the most successful Western chain in China) and found greater success.[23] As of September 30, 2007, eight East Dawning restaurants were in operation.[24]

International focus

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, Taco Bell, and WingStreet. 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.[25] The foreign expansion—particularly that of WingStreet, Taco Bell, Pizza Hut, and KFC—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 will buy A&W, and LJS will be acquired by LJS Partners LLC.[11]

In 2009, Yum! paid approximately $103 million to purchase 27% stake in Chinese hot pot chain Little Sheep.[26] On May 12, 2011,Yum made a pre-conditional cash offer to acquire additional 66% of Little Sheep for approximately $570 million.[27] 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.[28][29]

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.[30]

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.[31]

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.[32] 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.[33]

In 2013, its KFC subsidiary opened a fast casual version, KFC eleven, test location in Louisville on Bardstown Road.[34] 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.[35][36]

In 2014, Yum! launched a number of additional restaurant test concepts, Super Chix, U.S. Taco Co. and Banh Shop.[37] Yum! opened Super Chix in Central Arlington, Texas that is similar in format to Chick-fil-A on April 9, 2014.[38] In the summer of 2014, Yum!'s Taco Bell subsidiary launched its U.S. Taco Co and Urban Tap Room fast-casual taco concept restaurant in Huntington Beach, California, to take on fast casual restaurants like Chipotle and Panera.[39]

In the first quarter of 2015, Third Point Management and Corvex Management separately acquired an unspecified stake in the company.[40] The sole KFC Eleven was closed in April 2015.[34] A second Chix unit opened in May 2015 with additional menu items. Super Chix was sold to founder Nick Ouimet and an investment group in August 2015.[37]

In 2017, Yum! announced plans to open 10 Pizza Hut restaurants in Ethiopia, after signing a franchise with the country's Belayab Foods and Franchise PLC.[41]

Corporate

The KFC Yum! Center, Louisville's largest arena

The current executive chairman of Yum! Brands is Greg Creed.[42] The previous CEO was David C. Novak.[43] Novak became CEO of predecessor firm Tricon Global on January 1, 2000, and chairman of the board on January 1, 2001.[44] Greg Creed replaced Novak in his role as CEO on January 1, 2015.[45] At the AGM in May 2016, Robert D. Walter became non-executive chairman.

On October 20, 2015, Yum! Brands, Inc., announced that it intended to separate into two independent, publicly traded companies.[46][47] Yum China was spun off on November 1, 2016.[48][49]

Since 2006, Yum! Brands has served as the corporate sponsor of the Kentucky Derby.[50]

Brands

Current

Former

See also

References

  1. 1 2 3 4 5 "YUM! Brands, Inc., Historical Financial Summary, Fourth Quarter, 2016" (PDF). Yum! Brands. Retrieved April 4, 2017.
  2. ↑ "Yum Brands on the Fortune 500". Fortune. Retrieved June 19, 2017.
  3. 1 2 "YUM! Brands, Form 10-K, Annual Report, Filing Date Feb 22, 2018". secdatabase.com. Retrieved May 3, 2018.
  4. ↑ "YUM! Brands, Form 8-K, Current Report, Filing Date Feb 7, 2012". secdatabase.com. Retrieved May 3, 2018.
  5. ↑ "YUM! Brands, Form 10-12B, Filing Date Jul 2, 1997". secdatabase.com. Retrieved May 3, 2018.
  6. ↑ "YUM! Brands, Form 10-12B/A, Filing Date Jul 28, 1997". secdatabase.com. Retrieved May 3, 2018.
  7. ↑ "Yum! Brands Inc (YUM) Company Profile". Reuters.com. Reuters. Retrieved October 3, 2014.
  8. 1 2 Johnson, Greg (August 1, 1997). "Taco Bell's Parent to Be Based in Louisville, Ky". Los Angeles Times. Retrieved November 9, 2015.
  9. ↑ "YUM! Brands, Form 10-Q, Quarterly Report, Filing Date Oct 21, 1997". secdatabase.com. Retrieved May 3, 2018.
  10. ↑ "YUM! Brands, Form 10-K, Annual Report, Filing Date Mar 23, 1999". secdatabase.com. Retrieved May 3, 2018.
  11. 1 2 3 4 "Yum Sells 2 Fast-Food Chains". New York Times. September 22, 2011.
  12. 1 2 "YUM! Brands, Form 8-K, Current Report, Filing Date Mar 14, 2002". secdatabase.com. Retrieved May 3, 2018.
  13. ↑ "KFC taps 'Seinfeld' star, starts 'Wing Works' test". Nation's Restaurant News. Lebhar-Friedman. August 6, 2001. Archived from the original on July 16, 2012. Retrieved January 26, 2011.
  14. ↑ "YUM! Brands, Form DEF 14A, Filing Date Mar 29, 2002". secdatabase.com. Retrieved May 3, 2018.
  15. ↑ "Tricon to Change Name to Yum! Brands Inc". Entrepreneur. Business Wire. May 20, 2002. Retrieved October 28, 2017.
  16. ↑ "YUM! Brands, Form 8-K, Current Report, Filing Date May 24, 2002". secdatabase.com. Retrieved May 3, 2018.
  17. ↑ "Bulletin Business: Tricon finalizes purchase, plans 2-for-1 stock split". Star Bulletin. May 8, 2002. Retrieved October 28, 2017.
  18. ↑ "Pizza Hut, Pasta Bravo Test Co-Branding". Entrepreneur. Nation's Restaurant News. August 6, 2002. Retrieved November 10, 2015.
  19. ↑ "YUM! Brands, Form 8-K, Current Report, Filing Date Apr 24, 2003". secdatabase.com. Retrieved May 3, 2018.
  20. ↑ "Yum buys Pasta Bravo rights for P. Hut pairings". Nation's Restaurant News. Lebhar-Friedman. April 14, 2003. Archived from the original on July 10, 2012. Retrieved January 26, 2011.
  21. ↑ "YUM! Brands, Form 8-K, Current Report, Filing Date Feb 11, 2004" (PDF). secdatabase.com. Retrieved May 3, 2018.
  22. 1 2 3 Cyrek, Christopher (October 20, 2009). "Pizza Hut going after wings market". Dallas Business Journal. Dallas, Texas: American City Business Journals, Inc. Retrieved January 26, 2011.
  23. ↑ Adamy, J. (October 20, 2006). "One U.S. Chain's Unlikely Goal: Pitching Chinese Food in China". The Wall Street Journal.
  24. ↑ "Yum! Brands – Defining Global Company that Feeds the World".
  25. ↑ "Yum puts A&W, Long John Silver's up for sale". MSNBC. Associated Press. January 18, 2011. Retrieved January 20, 2011.
  26. ↑ "YUM! Brands, Form 10-K, Annual Report, Filing Date Feb 15, 2011". secdatabase.com. Retrieved May 3, 2018.
  27. ↑ "YUM! Brands, Form 10-Q, Quarterly Report, Filing Date Jul 19, 2011". secdatabase.com. Retrieved May 3, 2018.
  28. ↑ Guang, Yin (November 8, 2011). "China Corporate News: Yum's Little Sheep Takeover Review Cleared". China Perspective. Retrieved November 11, 2015.
  29. ↑ "YUM! Brands, Form 10-K, Annual Report, Filing Date Feb 21, 2012". secdatabase.com. Retrieved May 3, 2018.
  30. ↑ American fried chicken comes to the Palestinian territories, Los Angeles Times, February 4, 2012, access date February 20, 2012
  31. ↑ "Yum Brands' chicken in China contained excessive chemical levels, report says". Business First. January 25, 2013. Retrieved January 26, 2013.
  32. ↑ "Yum! Brands expands to Mongolia, plans more growth". Business First. May 29, 2013. Retrieved May 30, 2013.
  33. ↑ Narayan, Adi (October 23, 2013). "Yum to Invest $10 Billion With Partners in Emerging Markets Push". Bloomberg. Retrieved November 19, 2013.
  34. 1 2 Elson, Martha (April 29, 2015). ""What now?" after Highlands KFC eleven closes". The Courier-Journal. Retrieved November 11, 2015.
  35. ↑ "YUM! Brands, Form 10-Q, Quarterly Report, Filing Date Oct 15, 2013". secdatabase.com. Retrieved May 3, 2018.
  36. ↑ Hoang, Anh (October 26, 2013). "Should Investors Worry About Yum! Brands' Sluggish Third Quarter Results?". The Motley Fool. Archived from the original on August 10, 2016. Retrieved August 10, 2016.
  37. 1 2 3 Ruggless, Ron (August 14, 2015). "Super Chix founder, investors buy concept from Yum". Nation's Restaurant News. Penton Restaurant Group. Retrieved November 11, 2015.
  38. ↑ Daniels, Lauren Drewes (April 10, 2014). "The First Super Chix, a Fast-Food Chicken Joint from KFC's Owners, Opens in Arlington". Dallas Observer. Retrieved November 10, 2015.
  39. ↑ Dockterman, Eliana (April 24, 2014). "Taco Bell for Foodies". Time. Time Inc. Retrieved November 11, 2015.
  40. ↑ Herbst-Bayliss, Svea (May 1, 2015). "Third Point takes stake in Yum! Brands, stock climbs". Reuter. Thomson Reuters. Retrieved November 11, 2015.
  41. ↑ "Yum to open 10 Ethiopian Pizza Huts in African expansion". af.reuters.com. Retrieved 2017-04-25.
  42. ↑ "YUM! Brands, Form 10-K, Annual Report, Filing Date Feb 22, 2018" (PDF). secdatabase.com. Retrieved May 3, 2018.
  43. ↑ "Yum! Brands, Form 8-K, Current Report, Filing Date Feb 10, 2000". secdatabase.com. Retrieved February 16, 2013.
  44. ↑ "Yum! Brands, Form 10-K, Annual Report, Filing Date Mar 28, 2001" (PDF). secdatabase.com. Retrieved February 16, 2013.
  45. ↑ "YUM! Brands, Form 10-K, Annual Report, Filing Date Feb 17, 2015". secdatabase.com. Retrieved May 3, 2018.
  46. ↑ "YUM! Brands, Form 8-K, Current Report, Filing Date Oct 20, 2015". secdatabase.com. Retrieved May 3, 2018.
  47. ↑ "Yum! Brands announced that it intends to separate into two independent, publicly-traded companies." Company news release, October 20, 2015.
  48. 1 2 3 "YUM! Brands, Form 8-K, Current Report, Filing Date Nov 3, 2016". secdatabase.com. Retrieved May 3, 2018.
  49. ↑ "Yum! Brands, Inc. (NYSE: YUM) today announced that it has completed the separation of Yum China Holdings, Inc. ("Yum China") from Yum! Brands, creating two powerful, independent, focused growth companies."
  50. ↑ "Kentucky Derby including Yum Brands in its name – May. 5, 2006".
  51. ↑ "Closures: Chevy's, La Salsa, Pasta Bravo". Orange County Register. 2011-12-15. Retrieved 2011-12-26.
  52. ↑ Luna, Nancy (2012-01-13). "Dining Sea Change". Orange County Register.
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