How does ubiquitous Yum! Brands make money?



Company Profile

Yum! Brands is the world’s largest fast-food catering group, which owns many famous catering chain brands such as KFC, Pizza Hut, and Taco Bell.

In March 2002, Yum! announced the acquisition of two brands under Yorkshire Global Restaurants: A&W Restaurants and Long John Silver’s. At the same time, the company officially changed its name to Yum! Brands (ticker: YUM).

The origin of Yum! Brands

Since the Yum! Group is too large, we will take the top three brands in the group as examples to explain the origin of these brands.


In the 1930s, Harland Sanders ran a gas station in Kentucky and sold fried chicken made with his own unique recipe. Unexpectedly, fried chicken became very popular. In 1950, Sandoz began to operate under license in the United States, and KFC franchise stores also began to increase, reaching 600 in the United States in 1963. Too rapid expansion crushed an aging Sanders. In 1964, a group of investors led by John Brown and Jack Macy bought KFC for $2 million. In 1965, the company entered a period of rapid development. In 1969, KFC was successfully listed.

In the early 1970s, KFC was sold to Heublein, which was taken over by the RJ Reynolds (ticker: RAI) food and tobacco group; the chain was eventually sold to PepsiCo (ticker: PEP). It then continued to expand overseas and became the first western restaurant chain to open in China in 1987.

As of 2021, KFC operates 26,934 restaurants around the world.

Pizza Hut

In 1958, Frank Carney, a 19-year-old student at Wichita State University, and his 26-year-old brother Dan Carney borrowed $600 from their mother to start a pizza business. PepsiCo bought Pizza Hut for $300 million in 1977. Carney died of pneumonia in 2020.

As of 2021, Pizza Hut operates 18,381 restaurants worldwide, making it the world’s largest pizza chain by number of locations.

Taco bell

Taco Bell was founded in 1962 by Glen Bell. Serving a variety of Mexican-inspired food including tacos, burritos, quesadillas, nachos, novelties and specialty items. As of 2021, Taco Bell serves more than 2 billion customers annually at 7,791 restaurants, more than 93% of which are sold through franchisees.

PepsiCo bought Taco Bell in 1978 and then spun off its restaurant division into Tricon Global Restaurants.

Spin-off from PepsiCo

Tricon Global Restaurant, Inc., the predecessor of Yum!, was separated from PepsiCo on October 7, 1997 and became an independent public listed company.

Brands owned by Yum!

Yum Brands has a series of well-known restaurant subsidiary brands, the following are some of the most important and famous brands:

  • KFC (Global)
  • Pizza Hut (Global)
  • Taco Bell
  • WingStreet (US, Canada, Germany and Cyprus)
  • Banh Shop
  • The Habit Burger Grill
  • East Dawning (China)
  • Little Sheep (Mainland China, Hong Kong, Macau, United States, Japan, Canada, Southeast Asia, South Korea and the United Arab Emirates)
  • Wing Works
  • Pasta Bravo
  • China Wok (Latin America)

Operation and Market Performance

The world’s largest fast food restaurant group

According to the official information on the company’s website, Yum! Brands currently franchises or operates more than 53,424 restaurants in 155 countries and regions around the world, with a total of 1,500 world-class franchisees and 1.5 million employees.

Main brand revenue

In 2021, the overview of the proportion of each revenue sub-item is as follows:

BrandStores/UnitsInternational store ratioCountriesFranchise RatioRevenue (US$ million)
Taco Bell7,79110%3294%13,280
Pizza Hut18,38164%11199%12,955
The Habit Burger Grill3183%313%588
Yum! Brands53,42467%15798%58,188

Financial and share price performance

Main financial figures

11/23/2022Domino’s Yum (Pizza Hut)StarbucksMcDonald’s
Revenue (US$)4,357.4 +5.83%6,5484 +16.49%29,060.6 +23.6%23,222.9 +20.9%
Gross margin27.74%48.08%32.47%54.17%
Operating margin17.91%32.46%16.18%42.51%
Net margin11.72%23.92%14.45%32.49%

Stock price valuation

11/23/2022Domino’s Yum (Pizza Hut)StarbucksMcDonald’s
Market value (US$ billion)13.4535.3186.7182.42
Share price379.71125.3575.37246.64
Dividend yield1.15%1.8252.6%2.24%

Yum! in Greater China

Yum! Taiwan

On December 7, 2009, KFC’s operating rights in Taiwan were sold to Hong Kong’s Jardine Group.

Yum! China

On November 7, 2011, Yum! acquired China’s Little Sheep (小肥羊). In the Chinese market, the company owns the exclusive operation and authorization rights of KFC, Pizza Hut and Taco Bell, and fully owns the chain restaurants of Dongfang Dingbai (東方既白) and Little Sheep, with a total of more than 7,300 stores and more than 400,000 employees.

According to the revenue scale in 2021, Domino’s China is the third largest pizza company in China, second only to Pizza Hut under Yum! China and the local brand Zumbo Pizza.

Yum!’s financial report shows that China’s business accounts for more than half of the group’s global business. In 2015, Yum China’s turnover exceeded RMB 50 billion, and the Chinese market has always been the main growth engine for Yum!

Spin-off and listed

In 2016, Yum! split its mainland China business (ticker: YUMC) and listed in US.

credit: Yum

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