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QSR brands in the portfolio of Yum Brands

About Yum Brands: An Introduction

Yum Brands is a leading fast-food brand with global operations. The company has its headquarters in Louisville, Kentucky.

The company sells across 155 countries and had more than 53,000 stores operational worldwide as of 2021. Yum Brands has expanded its global footprint at a significant pace over the past several years. The largest brand in its portfolio is KFC, which is the largest restaurant chain worldwide in the QSR chicken segment.

In this post, we will discuss the four brands in the portfolio of the company and their performance over the last two years.

Yum Brands came into being when Pepsico spun off KFC, Taco Bell and Pizza Hut in 1997, which the company owned previously.

The parent company was renamed Yum Brands in 2002 (earlier known as Tricon Global Restaurants). It has experienced strong growth in its market share and popularity since then.

The QSR sector is marked by intense competition where there are several international and local brands are constantly battling for market share and growing their customer base.

‘Yum Brands’ has a diversified product portfolio and its popularity continues to grow driven by its focus on product quality, competitive pricing and customer experience.

Here are the four brands in the portfolio of Yum Brands. Its most recent acquisition is the Habit Burger Grill. The company runs each of the brands’ operations as a separate division.

QSR Brands in Yum Brands’ Portfolio

KFC Division:

KFC is the largest brand in the portfolio of Yum Brands and the largest international brand in the QSR chicken segment. However, it is also the most popular and well-known brand in the portfolio of Yum Brands.

It is the largest brand in Yum’s portfolio based on the number of store units operational and total system sales. As of 2021, the number of KFC restaurants operational worldwide was 26,934 and 99% of these stores were run through franchisees.

KFC has 85% of its store units located outside the United States and sells across 149 countries.

It was founded by Colonel Harland D Sanders in Corbin Kentucky, who was an early developer of the quick service restaurant format and a pioneer of the franchise concept. Its first franchise opened in 1952.

KFC’s systemwide sales amounted to $31,365 million in 2021.

Taco Bell Division:

The Taco bell Division of Yum Brands is the second largest brand base on systemwide sales and third largest based on the number of stores operational.

Glen Bell opened the first Taco Bell restaurant in Downey, California in 1962 and sold the first franchise in 1964. The Taco Bell brand specializes in Mexican style food items including tacos, burritos, quesadillas, salads, nachos and other similar items.

Taco Bell Division is also run mainly by franchisees. As of 2021, 94% of its restaurant stores were run by franchisees.

The brand had 7,791 stores operational in 2021 and only 10% of these stores were located outside the United States.

Taco bell generated $13,280 million in systemwide sales in 2021. Its stores are operational in 32 countries.

Pizza Hut Division:

The Pizza Hut Division is the third largest segment based on net systemwide sales and the second largest based on the number of stores.

Its first restaurant opened in Wichita, Kansas in 1958 and in just one year it opened its first franchise. Today, it is the largest chin in the QSR pizza sector specializing in pizza products. As of 2021, it had 18,381 stores operational worldwide and 64% of these stores were operational outside the United States.

Pizza hut has its stores operational in 111 countries. 99% of its Pizza Hut stores are operated by its franchisees.

It generated $12,955 million in systemwide sales in 2021.

In 2018, Pizza Hut entered into a a strategic alliance with Food Delivery Brands Group, S.A. (previously named Telepizza Group S.A.(“Telepizza”)), to be the master franchisee of Pizza Hut in Latin America and portions of Europe, which added approximately 1,300 Telepizza units to the PizzaHut Division unit count of Yum Brands.

Habit Burger Grill:

Habit Burger Grill is the most recent acquisition of Yum brands. Its first restaurant opened in 1969 in Santa Barbara, California. It offers a diverse menu that includes chargrilled burgers and sandwiches made-to-order over an open flame and topped with fresh ingredients.

Yum Brands acquired Habit Burger grill in 2020 for a sum of $375 million. At the time of its acquisition there were 260 Habit Burger Grill stores operational. The number has grown to 318 now which means that yum Brands is expanding its first Burger chain faster and given the significant resources at its disposal, Yum could grow it into a significant competitor for the larger burger chains like Burger King, McDonald’s, Subway or Wendy’s.

Of the total 318 stores operational in 2021, 276 were owned by the company and the rest 42 stores were run by franchisees. Yum brands owned 90% of the Habit Burger Grill stores operational in the United States in 2021.

Habit Burger Grill had systemwide sales worth $588 million in 2021 and generated $525 million in the form of net revenues for the parent company. Yum Brands had an operating profit of $2 million from Habit Burger Grill in 2020.

A few last words about Yum Brands:

Yum Brands is among the leading QSR brands with a global footprint. The company has kept expanding its footprint inside and outside the US by opening new stores at a rapid pace. KFC is the largest brand under the umbrella of Yum Brands and also the largest brand in the QSR chicken segment. The parent brand Yum has a diverse portfolio that now also includes Habit Burger Grill, which it is expected to grow and position against the other leading burger chains in the United States market.

Given the significant resources and capabilities that Yum brand owns, it would not be a difficult task. The rest three brands including KFC, Pizza Hut and Taco Bell are globally famous brands. The QSR sector is marked by intense competition and there are several leading restaurant chains including McDonald’s, Burger King, Domino’s, Popeye’s as well as several more local and international brands in the US and global market that compete against the brands in portfolio of Yum brands. Yum is investing in quality, innovation and customer experience to grow its QSR brands rapidly. It has also maintained strong relationships with its franchisees to maintain the profitability and operational excellence of its business model.