Based in
Louisville, Kentucky, Yum! is one of the world's largest
fast food restaurant companies in terms of system units. In 2016, Yum! had 43,617 restaurants, including 2,859 that were company-owned and 40,758 that were franchised, in 135 nations and territories worldwide.[3]
History
PepsiCo fast food division
The company's history began in 1977, when
PepsiCo entered the restaurant business by acquiring
Pizza Hut from co-founders
Dan and Frank Carney. A year later, PepsiCo purchased Taco Bell from founder
Glen Bell.[4] In July 1986,
R. J. Reynolds sold
KFC to PepsiCo[4] to pay off debt from its recent purchase of
Nabisco.
In 1990,
Hot 'n Now was acquired via Taco Bell from William Van Domelen,[5] but the company was sold in 1996.[6] In 1992, PepsiCo acquired
California Pizza Kitchen. In 1993, it acquired
Chevys Fresh Mex,[7]D'Angelo Grilled Sandwiches,[8] and the American division of Canadian chain
East Side Mario's. These chains were later sold when PepsiCo exited the restaurant business and spun off KFC, Pizza Hut and Taco Bell (see next paragraph).[9][10][11] In 1997, PepsiCo sold PepsiCo Food Systems restaurant-supply unit to Ameriserve Food Distribution Inc.[12]
Tricon Global Restaurants
Yum! was created in 1997 as Tricon Global Restaurants, Inc. from
PepsiCo's fast food division as the parent corporation of the KFC, Pizza Hut and Taco Bell restaurant companies.[13][14] The decision was announced in January and the
spin off was effected on 6 October.[15] Tricon selected Louisville, also the site of KFC's headquarters, as its corporate headquarters.[14] Taco Bell and Pizza Hut continued to be headquartered in
Irvine, California and
Dallas, Texas, respectively.[14]
In 2000, Tricon Global tested multi-branded locations with
Yorkshire Global Restaurants. 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.[16]
In 2001, KFC started test restaurants in Austin, Texas, called "Wing Works", a chicken wing line sold with one of a few flavored sauces. KFC also hired a consultant to develop a breakfast menu.[17]
Yum! Brands
Yorkshire in March 2002 announced it would merge with Tricon Global Restaurants to form Yum! Brands. The merger was finalized on May 8, 2002, and the name change became effective on May 22, 2002.[18] On June 6, 2002, Yum! executed a two-for-one
stock split.[19] Shortly afterwards, due to Yum!'s lifetime contract with Pepsi, Long John Silver's and A&W Restaurants (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
Keurig Dr Pepper).
In 2002, Yum! began testing co-branding locations pairing Pizza Hut with
Pasta Bravo,
Back Yard Burgers, and A&W.[20] The Pasta Bravo concept was acquired in 2003 from Pasta Bravo, Inc. of Aliso Viejo, California for $5 million to pair with Pizza Hut.[21]
In 2003, Yum! launched WingStreet as a hybrid combo unit with an existing Pizza Hut franchise.[22] 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.[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
In January 2011, Yum! announced its intentions to dispose 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.[25] 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 dispose of 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 Long John Silver's chains. A Great American Brand bought A&W, and Long John Silver's was sold to LJS Partners LLC.[26]
In May 2011, Yum! agreed to purchase Chinese
hot pot chain
Little Sheep for
HK$4.56 billion.[27] The deal spent more than 4 months in antitrust 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]
In 2012, a KFC opened in
Ramallah and became the first American fast food restaurant to operate in the
West Bank; a Pizza Hut was also planned.[29]
In 2013, a few KFC locations in China supplied chicken found to contain "excess levels of chemical residue". Yum! had lost 6% of sales from publicity in China as of January 25, 2013.[30]
The company opened its first restaurant in
Ulaanbaatar, Mongolia, in May 2013. For Mongolia, KFC was 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.[31] Yum! Brands 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.[32]
In 2013, its KFC subsidiary opened a fast casual version, KFC eleven, test location in Louisville on Bardstown Road. The sole KFC Eleven was closed in April 2015.[33] 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.[34]
In 2014, Yum! launched a number of additional restaurant test concepts, Super Chix, U.S. Taco Co. and Banh Shop.[35] Yum! opened Super Chix in Central Arlington, Texas, a restaurant similar in format to
Chick-fil-A, on April 9, 2014.[36] 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.[37]
In the first quarter of 2015,
Third Point Management and Corvex Management separately acquired an unspecified stake in the company.[38] 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.[35]
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.[39]
In January 2020, Yum! announced they were acquiring Irvine, California-based
The Habit Burger Grill, for $375 million; the transaction was completed on March 18, 2020.[40][41]
In 2020 and 2021, Yum! acquired several technology companies. In March 2020, it acquired Heartstyles, an omnichannel training company.[42] In March 2021, it acquired Tictuk Technologies, an Israeli omnichannel ordering and marketing solutions provider,[43] and announced it was acquiring Kvantum Inc., an artificial intelligence-based consumer insights and marketing technology company.[44] In September 2021, Yum! completed the acquisition of Australian kitchen order management and delivery technology company Dragontail Systems for US$69.1 million in cash.[45]
In December 2023 the company announced it will acquire 218 restaurants from its largest franchisee EG Group in the UK and Ireland. After completion in 2024, all of the privately owned EG Group's KFC UK and Ireland businesses will come under Yum's KFC UK and Ireland management.[46]
Corporate
The current CEO of Yum! Brands is
David Gibbs. Former CEOs include
Greg Creed and
David C. Novak.[47] Novak became CEO of predecessor firm Tricon Global on January 1, 2000, and
chairman of the board on January 1, 2001.[48]Greg Creed replaced Novak in his role as CEO on January 1, 2015.[49] At the AGM in May 2016,
Robert D. Walter became non-executive chairman. At the end of 2019 Greg Creed retired as CEO and the current COO (David Gibbs) was Creed's replacement.[50]
Since 2006, Yum! Brands has served as the corporate sponsor of the
Kentucky Derby.[51]
On October 20, 2015, Yum! Brands, Inc., announced that it intended to separate into two independent, publicly traded companies.[52]Yum China was spun off on November 1, 2016.[53] Yum China's operations excluded stores in Hong Kong, Macau and Taiwan, which are franchised from Yum Brands through
Jardine Matheson unit
Jardine Pacific's Jardine Restaurant Group.
Hot 'n Now – Acquired by PepsiCo in 1990, placed under the Taco Bell branch. Now mostly defunct, with only 1 out of 150 remaining in Sturgis, Michigan, now owned by BTND, LLC the owner of
Burger Time
Long John Silver's – Sold to LJS Partners, Long John Silver's franchisees and other private investors, in 2011[26]
^
abCyrek, Christopher (October 20, 2009).
"Pizza Hut going after wings market". Dallas Business Journal. Dallas, Texas: American City Business Journals, Inc.
Archived from the original on February 25, 2021. Retrieved January 26, 2011.
^Dockterman, Eliana (April 24, 2014).
"Taco Bell for Foodies". Time. Time Inc.
Archived from the original on November 19, 2015. Retrieved November 11, 2015.