A Brief History of Yum! Brands, Inc. (YUM)

Yum! Brands, Inc. (NYSE: YUM), originally a division of PepsiCo, has evolved into one of the world's largest fast-food restaurant companies. The journey began in 1977 when PepsiCo entered the restaurant business with the acquisition of Pizza Hut.

In 1986, PepsiCo expanded its restaurant operations by purchasing Kentucky Fried Chicken (KFC). Following this, in 1990, Taco Bell joined the family. These three chains formed the core of what would later become Yum! Brands.

In 1997, PepsiCo decided to spin off its restaurant division into a separate company, named Tricon Global Restaurants, Inc. This name was later changed to Yum! Brands, Inc. in 2002 to better reflect the company's global ambitions and its diverse portfolio of brands.

Since its inception, Yum! Brands has grown significantly, driven by strategic acquisitions and expansion into new markets. Some key milestones include:

• 2002: Company renames itself to Yum! Brands, Inc.
• 2003: Acquisition of the Long John Silver’s and A&W All-American Food Restaurants, expanding the company's portfolio.
• 2011: Yum! Brands operates over 38,000 restaurants in more than 110 countries.
• 2016: Yum! China spun off into a separate entity, allowing Yum! Brands to focus on other international markets.
• 2020: Yum! Brands acquires The Habit Burger Grill, marking its entry into the fast-casual dining segment.

Throughout its history, Yum! Brands has remained focused on growth and innovation, consistently adapting to changing consumer preferences and expanding its global footprint.

Who Owns Yum! Brands, Inc. (YUM)

Yum! Brands, Inc. (YUM) is a publicly traded company, meaning its ownership is distributed among numerous shareholders who own shares of its stock. However, certain entities and individuals hold significant portions of these shares, giving them substantial influence over the company's direction and operations. Here are some of the key stakeholders:

• Institutional Investors: A large percentage of Yum! Brands' shares are held by institutional investors such as mutual funds, pension funds, and insurance companies. These institutions typically have significant stakes and can influence the company's policies and decisions.
• Vanguard Group, Inc.: One of the largest asset management firms in the world, Vanguard holds a significant portion of Yum! Brands' stock. This makes it one of the most influential shareholders in the company.
• BlackRock, Inc.: Another major player in the asset management industry, BlackRock also holds a substantial number of shares in Yum! Brands, further adding to its influence in the company's governance.
• Directors and Executives: Beyond institutional investors, the company's board of directors and executive team also own shares. This aligns their interests with those of other shareholders and provides them with a direct stake in the company's success.
• Retail Investors: Individual retail investors also own shares of Yum! Brands. Although individually they might not hold large stakes, collectively, they form an important part of the company's shareholder base.

Overall, the ownership of Yum! Brands, Inc. is a mix of institutional and individual investors, all of whom play a role in guiding the company's strategic direction through their voting rights and investment decisions.

Yum! Brands, Inc. (YUM) Mission Statement

The mission statement of Yum! Brands, Inc. (YUM) is a reflection of its commitment to customer satisfaction and global growth. Yum! Brands aims to build the world's most loved, trusted, and fastest growing restaurant brands. Their mission is underpinned by core principles that drive their business strategy and operations.

"To build the world’s most loved, trusted, and fastest growing restaurant brands."

The company emphasizes a strong focus on several key areas:

• Customer Focus: Putting the customer at the heart of everything they do to ensure an exceptional dining experience.
• Global Growth: Expanding their footprint across the globe with a diverse portfolio of well-known brands like KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.
• Innovation: Continuously innovating their products, services, and business models to stay ahead in a dynamic marketplace.
• Sustainability: Committing to sustainable practices and responsible sourcing to make a positive impact on society and the environment.
• Employee Development: Fostering a culture of growth and development to empower their employees and create a thriving workplace.

Yum! Brands' mission statement and guiding principles demonstrate their dedication to delivering great food, exceptional service, and making a positive impact on the communities they serve.

How Yum! Brands, Inc. (YUM) Works

Yum! Brands, Inc. (YUM) is a multinational fast-food company that operates some of the world's most recognized and popular restaurant chains, including KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. The company is headquartered in Louisville, Kentucky, and uses a combination of corporate ownership and franchising to expand its global footprint. Here's an overview of how Yum! Brands operates:

Yum! Brands primarily utilizes a franchising model, allowing individual entrepreneurs or companies to own and operate their restaurants under the Yum! Brands umbrella. This model helps in rapid expansion with minimized capital expenditure from the corporate side. Here's how the business model works:

• Franchising: A significant portion of Yum! Brands' restaurants are franchised. Franchisees pay an initial fee to open a restaurant and ongoing royalties based on a percentage of sales. This creates a steady revenue stream for Yum! Brands with reduced operational responsibilities.
• Company-Owned Stores: While franchising is the primary model, Yum! also operates company-owned stores in several strategic or high-performing markets. This allows the company to maintain control over brand standards and pilot new concepts.

Yum! Brands employs a sophisticated supply chain strategy to ensure quality and cost-effectiveness. This includes:

• Global Sourcing: The company sources ingredients and supplies from around the world to maintain consistency and quality across all locations.
• Distribution Centers: Strategic placement of distribution centers ensures timely delivery of fresh supplies to restaurants, minimizing disruptions and maximizing efficiency.
• Supplier Relationships: Long-term partnerships with suppliers help in achieving economies of scale and maintaining high-quality standards.

Yum! Brands invests heavily in marketing and branding to maintain its competitive edge. Here are key elements:

• Global Marketing Campaigns: Coordinated global marketing campaigns ensure a unified brand message across different markets.
• Local Adaptations: Despite global campaigns, Yum! Brands adapts its marketing and menu offerings to suit local tastes and preferences.
• Digital Initiatives: Emphasis on digital marketing, mobile apps, and online ordering platforms help attract tech-savvy customers and improve efficiency.

Yum! Brands places a strong emphasis on innovation, continuously working on new menu items, technologies, and business strategies. This involves:

• Menu Innovation: Continuous development of new menu items to cater to changing consumer tastes and preferences.
• Technology Integration: Implementation of advanced technologies such as AI, machine learning, and data analytics to enhance customer experience and operational efficiency.
• Sustainability Initiatives: Focus on sustainability practices, including eco-friendly packaging and sourcing sustainable ingredients.

How Yum! Brands, Inc. (YUM) Makes Money

Yum! Brands, Inc. (YUM) is a global fast-food corporation that owns several well-known restaurant brands, including KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill. The company generates revenue through various streams, which can be broadly categorized into franchise fees, company-owned restaurant sales, and other related income.

• Franchise Fees:

One of the primary ways Yum! Brands makes money is through franchise fees. The company operates a significant number of its restaurants under a franchise model. Franchisees pay initial setup fees, ongoing royalties, and advertising fees to use the brand name, operating system, and marketing support provided by Yum! Brands. This model ensures a steady stream of revenue without the need for heavy capital expenditure on building and maintaining the restaurants.

• Company-Owned Restaurant Sales:

While a large portion of Yum! Brands' restaurants are franchised, the company also operates its own restaurants around the world. Revenue from company-owned restaurant sales comes from the direct sale of food and beverages to customers. These sales contribute to the company's top line and allow it to have a more direct control over brand and operational standards.

• Royalties and Licensing Income:

In addition to franchise fees, Yum! Brands earns royalties based on sales generated by franchised restaurants. Typically, these royalties are a percentage of the gross sales, ensuring that the company benefits from the franchised locations' performance. Furthermore, Yum! Brands licenses its trademarks and recipes to third parties, which provides additional streams of royalty income.

• Advertising Fees:

Franchisees contribute to a collective advertising fund managed by Yum! Brands. This fund is used to create marketing campaigns that benefit all franchise locations. The company charges a percentage of the franchisees' gross sales as advertising fees, which not only funds these campaigns but also adds to the overall revenue of the corporation.

• Supply Chain and Other Services:

Yum! Brands also earns money through its supply chain operations. The company often provides supply chain services to its franchisees, including procurement of ingredients, packaging, and other essential supplies. These services are usually provided at a markup, contributing to the company's profitability. Additionally, Yum! Brands sometimes offers training and support services to franchisees, for which it charges fees.

In summary, Yum! Brands, Inc. derives revenue from a diversified set of streams, including franchise fees, company-owned restaurant sales, royalties, licensing income, advertising fees, and supply chain services. This diversified revenue model helps the company withstand market fluctuations and ensures a steady flow of income.