Make You Go Yum
December 1, 2007
Make You Go Yum
By Tom Wray, associate editor
Yum! Brands capitalizes on the diversity of tastes to grow a sprawling QSR empire.
One of the country’s biggest quick-service restaurant operators isn’t a single hamburger chain. Oh, there are hamburgers involved, but they form just a single part of the wide ranging Yum! Brands.
Based in Louisville, Ky., Yum! Brands has more than 34,000 restaurants worldwide. However, unlike giants such as McDonald’s and Burger King, the majority of the restaurants don’t serve hamburgers. They serve everything else.
Yum! Brands owns KFC, Taco Bell, Long John Silver’s, Pizza Hut and A&W All American Food. Those chains, plus the company’s new operations in China, brought in more than $9.5 billion in 2006.
Yum! was born in 1997 as Tricon Global Restaurants when soft drink maker Pepsico spun off its QSR division. At the time, it was the franchisor of KFC, Pizza Hut and Taco Bell. Long John Silver’s and A&W joined the family in 2002 when the company acquired Yorkshire Global Restaurants. That’s also when the company changed it’s name to Yum! in an effort to better reflect the brand portfolio. As a group, all the brands represent one of the largest QSRs in the world by number of locations. Even as individual brands, chains such as KFC, Taco Bell and Pizza Hut routinely rank in the top 20 nationally in size and income.
By the brand
Each of the company’s brands has its own colorful histories. Its largest brand is KFC, formerly known as Kentucky Fried Chicken. Founded by Harland Sanders, his first store was a Sander’s Court and Café in Corbin, Ky. The first franchise was built in 1952 by Pete Harman in Salt Lake City, Utah. By 1960, there were 400 franchised stores in the United States and Canada. Now, there are 11,000 locations in 80 countries worldwide.
Another of its large and very popular chains is Taco Bell. This brand, now synonymous with fast-food tacos, got its start in 1946 when Glen Bell of San Bernadino, Calif., came home from World War II and started a business. He started with Bell’s Drive-In and sold hot dogs. In 1952, he sold the hot dog stand and worked on a perfected version. About the same time, the McDonald’s brothers were starting their soon to be famous business in the same city. Bell started to think about alternative menu items.
Bell was an avid Mexican food fan and was aware of how hard it was to get tacos to go from a full-service restaurant. Starting in a Mexican neighborhood, he experimented to come up with the right ingredients and cooking methods. His success grew and by 1955, he had three stands named Taco Tia. By 1962, the first Taco Bells were being built in Downey, Calif. The first franchise was built in 1964. By 2005, there were 5,800 Taco Bells on four continents.
Pizza Hut, one of the original pizza delivery chains, began in 1958 when two brothers in Wichita, Kan., bought some secondhand equipment with $600 borrowed from their mother. The concept was new to many Americans at the time, but the brothers saw the potential and the success.
By 1968, Pizza Hut was opening in Canada. Today, there are 7,500 Pizza Huts in 100 countries throughout the world.
Long John Silver’s stands apart by being one of the largest seafood fast-food chains in the world. The brand’s 1,200 locations have been serving batter-dipped fish, chicken, shrimp, cole slaw and hushpuppies since 1969.
A&W is the oldest of Yum!’s brands. Roy Allen started the restaurant in 1919 in Lodi, Calif., with the first A&W root beer. That root beer is still sold at all A&W All American restaurants.
Allen took on a partner in 1922, Frank Wright (the W in the name). It wasn’t long before there were locations throughout northern and central California with franchises as far away as Texas and Utah. Now, A&W is available throughout the United States, Canada and 11 other countries.
Yum!’s newest division is Yum! China. The division is based in Shanghai and covers more than 2,600 restaurant locations in mainland China, Taiwan and Thailand. Since 2005, it’s grown so large that its earnings ($290 million as of 2006) must be reported separately from the rest of the corporation.
The largest division is Yum! International. This division handles the 12,000 international locations outside of China. In 2006, the division had operating profits of more than $407 million. Each year of the past seven, the division has opened 700 restaurants worldwide.
Yum! has used the benefit of having so many distinct brands under its umbrella to its advantage. The company has lead the industry in multibranding locations. The combinations of KFC and Taco Bell or A&W and Long John Silver’s offers consumers more choice in one location and maximizes the awareness of all the company’s brands. Yum! now has 3,600 company-owned and franchised multibrand locations.
As is fitting for such a wide ranging company, Yum! has been recognized for its efforts at consumer satisfaction and diversity in the workplace.
The company has based its corporate culture on a program called CHAMPS. The program is centered on the basics of customer service including Cleanliness, Hospitality, Accuracy, Maintenance, Product Quality and Speed.
Work and life
Over the past several years, the company has been recognized by several organizations for the quality of worklife and opportunities. For the past four years, Fortune magazine has named Yum! as one of the top 50 companies for minorities and for women. Black Enterprise Magazine has named it as one of the 40 best companies for diversity for the past two years and Hispanic Magazine has named it as one of the top 100 companies providing opportunities for Hispanics. BusinessWeek has named it as one of the top 15 companies for in-kind corporate philanthropy.
Yum! has also gained recognition in each of the cities it has a divisional headquarters. It was named theNo. 1 company for work/life balance in its home city of Louisville, headquarters for the corporation as a whole, KFC, A&W and Long John Silver’s. The Pizza Hut division has been named the best place to work in its headquarters of Dallas, Texas.