Yum! Brands

SUBMITTED TO- SUBMITTED BY-

MS. ANU BANSAL MEHAK

FACULTY, MAIMS

CHAPTER 1

INTRODUCTION

1.1 TITLE:

“Financial Analysis OF Yum Brands Inc in year 2011-2012”.

1.2 ORGANIZATION:

“Yum! Brands, Inc. (NYSE: YUM) or Yum!”.

1.3 OBJECTIVE:

THE PRIMARY OBJECTIVE

1. TO STUDY THE PROFITABILITY RATIOS AND FINANCIAL STATUS OF YUM !

BRANDS

2. TO DO THE COMPETITIVE ANALYSIS FOR YUM BRANDS

THE SECONDARY OBJECTIVE

Find company’s expansion plans in Asia-pacific with special reference to India

1.4 RESEARCH METHODOLOGY:

1.3.1 RESEARCH DESIGN

Research type is descriptive using secondary data.

1.3.2 DATA COLLECTION

Data was collected from books, internet, magazines and newspapers.

1.3.3 LIMITATIONS

SOME FIGURES MIGHT NOT BE ACCURATE SINCE DATA USED IS SECONDARY IN

NATURE.

MISMATCH OF UNITS OF MEASURE.

INTERNAL DATA MAY BE MAINTAINED AT A LEVEL OF AGGREGATION TOO

EXTREME BE USEFUL AS INPUTS

CENSUS GEOGRAPHIC AREAS NOT THE SAME AS GEOGRAPHIC AREAS OF INTEREST

TO THE COMPANY - OFTEN TOO AGGREGATED.

MISMATCH BETWEEN PURPOSE COLLECTED AND PURPOSE USED.

RECORDS MAY NOT BE WELL MAINTAINED OR ORGANIZED.

THE QUALITY OF INTERNAL SECONDARY DATA MAY BE EXAGGERATED OR

BIASED.

Yum! Brands, Inc. (NYSE: YUM) or Yum! is a Fortune 500 corporation. Yum! operates or licenses Taco Bell, KFC, Pizza Hut, Wing street, and Long John Silver's restaurants worldwide, and A&W Restaurants (excluding A&W in Canada).

Based in Louisville, Kentucky, it is the world's largest fast food restaurant company in terms of system units—over 36,000 restaurants around the world in more than 110 countries and territories. In 2008, Yum!'s global sales totaled more than US$11 billion.

YUM! RESTAURANTS INDIAYum! Restaurants India became a separately reported division in late 2011, underscoring the potential scale of India as a key emerging market. Together with Yum! China and Yum! Restaurants International, this important division contributes to our robust international growth.

Today, our India business consists of more than 220 KFCs and 170 Pizza Hut restaurants with strong unit growth. KFC is the fastest growing quick-service restaurant brand in India, and Pizza Hut has been ranked as the #1 most trusted food-service brand in India for a sixth year in a consumer survey by The Economic Times. India also has over 100 Pizza Hut Home Service units. Additionally, Taco Bell has entered India as part of our efforts to develop Taco Bell into our third international brand.

Our team in India has established a highly successful business model to accelerate aggressive future growth. We are very excited about our development in the world's second largest emerging market.

History

Yum! was created on October 7, 1997, as Tricon Global Restaurants, Inc. an independent company, as a result of a spin-out from PepsiCo, which owned and franchised the KFC, Pizza Hut and Taco Bell brands worldwide. Because of the company's previous relationship with Pepsi, Yum! Brands has a lifetime contract with PepsiCo, with notable exceptions being the contract of A&W Restaurants with Dr Pepper Snapple Group to be the exclusive restaurant provider of A&W Root Beer, and the contracts of franchisees such as HMSHost and college-operated locations with Coca-Cola which override Yum's lifetime PepsiCo contract, along with some scattered KFC franchises across the United States which continue to maintain Coke fountain rights.

Yum! president David C. Novak is a director of J.P. Morgan Chase and became chief executive officer of Yum! Brands on January 1, 2000, and chairman of the board on January 1, 2001. He is also a member of the Yum! executive/finance committee.

In March 2002, Tricon announced the acquisition of Lexington, Kentucky,-based Yorkshire Global Restaurants, owner of the Long John Silver's and A&W All-American Food chains and its intention to change the company's name to Yum! Brands, Inc. On May 16, 2002, the name change became effective after a vote during the company's annual shareholders meeting, and on June 17, 2002, Yum! executed a two-for-one stock split. Shortly afterwards, due to Yum!'s lifetime contract with Pepsi, Long John Silver's and A&W Restaurants (both of which previously served Coca-Cola) switched to Pepsi products once their franchise contracts expired, with A&W retaining A&W Root Beer from a separate deal with Dr Pepper Snapple Group.

The growth of Yum! Brands throughout the United States has slowed from its previous rapid expansion because the chain has saturated most of the domestic market. The future growth of Yum! Brands is targeted mainly at other countries; China in particular has a large population and is enjoying increases in income.

Since 2006, Yum! Brands has served as the corporate sponsor of the Kentucky Derby.

A single Yum! restaurant facility co-branded as Taco Bell and KFC in San Francisco, California

A Taco Bell and a KFC on adjacent lots in Burlington, North Carolina

Brands

A&W Restaurants (global, limited in Canada) KFC / Kentucky Fried Chicken (global)

Pizza Hut (global)

Taco Bell (global)

WingStreet (United States, Canada, Germany and Cyprus)

Long John Silver's (United States, Puerto Rico, Taiwan, New Zealand, Australia and Singapore)

Dong Fang Ji Bai (East Dawning) (People's Republic of China)

YUM! Brands the world's largest restaurant company in terms of system restaurants with more than 36,000 restaurants in over 110 countries and territories and over 1 million associates. Four of our restaurant brands – KFC, Pizza Hut, Taco Bell and Long John

Silver's – are the global leaders of the chicken, pizza, Mexican-style food and quick-service seafood categories

Specialties Quick service restaurants , chicken, pizza, tacos

Yum! is around the globe and in your local neighborhood. With five brands, 35,000 restaurants in over 100 countries, and over 1 million employees, there are countless positions and opportunities both near and far. Check out our Restaurant Support Center locations to get a snapshot of Yum! city life.

Chapter 2

COMPANY PROFILE

2.1 COMPANY OVERVIEW

Yum! Brands, Inc., founded in 1977 andheadquartered in Louisville,

Kentucky, operates franchises and licenses several chains of restaurants

including KFC, Pizza Hut, Taco Bell, Long John Silver’s (LJS) and All

America Food (A&W). The company is a leader in the restaurant industry with approximately

37000 stores operating in 110 countries. The company put LSJ and A& W for sale in March of

2011 in order to focus on its global expansion.

Yum! Brands Inc. exports successful restaurant concepts around the world, particularly to China. But after reporting second-quarter earnings last week, the company said it hopes to import some of its best international practices and reverse the disappointing performance of its domestic units.

Weakened U.S. sales weighed down 2 percent comparable-sales gains in Yum’s international division and 18-percent gains in China in the second quarter.

On the same day Louisville, Ky.-based Yum disclosed a 4-percent drop in same-store sales for its 17,294 U.S. restaurants, a report surfaced that chief executive David Novak would call on the company’s ad agencies to devise a plan to improve domestic sales at Taco Bell, KFC and Pizza Hut.

However, considering Yum structural challenges Novak identified during a conference call with financial analysts last week, the company may have challenges beyond just marketing. Yum’s three principal brands all face fierce competition in their segments. In the case of Taco Bell, its most profitable domestic brand, negative publicity from a withdrawn lawsuit dampened sales and traffic more deeply and for longer than executives expected.

“Yum’s U.S. business takes the ‘prize’ for the worst-performing restaurant business we know of,” wrote J.P. Morgan securities analyst John Ivanhoe, “with all three of its brands negative-4 percent versus our negative-2-percent [estimate], including negative-2 percent at Pizza Hut and negative-5 at KFC.”

2.2 RECENT EVENTS

2.2.1 The 1.3 billion population and the particular tastes of the food in China will ensurethat

Yum China will continue to grow substantially in the next few years.

2.2.2 The Yum International division also serves as catalyst for the revenue growth for the

upcoming years. Yum is expanding its business in five major countries including India,

Germany, France, Russia, and Africa.

2.2.3The U.S. division has seen growth in the recent quarter, and a menu change has proven

a successful strategy in bringing back customers from its competitors.

2.2.4The relatively stable earnings prospect is another factor as to why our group

recommends this stock to investors. This company will have stable earnings whether in

financial downturns or in financial expansion periods because of the affordable prices that

the restaurants offer.

DIFFERENT RESTAURANTS UNDER YUM! BRANDS

KFC Corporation (KFC), founded and also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States. KFC has been a brand and operating segment, termed a concept of Yum! Brands since 1997 when that company was spun off from PepsiCo as Tricon Global Restaurants Inc.

KFC primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KFC also offers a line of grilled and roasted chicken products, side dishes and desserts. Outside North America, KFC offers beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare.[citation needed]

The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952, though the idea of KFC's fried chicken actually goes back to 1930. The company adopted the abbreviated form of its name in 1991. Starting in April 2007, the company began using its original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the U.S. as part of a new corporate re-branding program; newer and remodeled restaurants will have the new logo and name while older stores will continue to use the 1980s signage. Additionally, Yum! continues to use the abbreviated name freely in its advertising.

History

The restaurant in North Corbin, Kentucky where Colonel Sanders developed Kentucky Fried Chicken\

The first KFC restaurant, situated in South Salt Lake, Utah and since replaced by a new KFC on the same site

Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime. Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named "Sanders Court & Café" and was so successful that in 1936 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street. When Sanders prepared his chicken in his original restaurant in North Corbin, he prepared the chicken in an iron skillet, which took about 30 minutes to do, too long for a restaurant operation. In 1939, Sanders altered the cooking process for his fried chicken to use a pressure fryer, resulting in a greatly reduced cooking time comparable to that of deep frying. In 1940 Sanders devised what came to be known as his Original Recipe.

Today, some of the older KFC restaurants have become famous in their own right. One such restaurant is located in Marietta, Georgia. This store is notable for a 56-foot (17 m) tall sign that looks like a chicken. The sign, known locally as the Big Chicken, was built for an earlier fast-food restaurant on the site called Johnny Reb's Chick, Chuck and Shake. It is often used as a travel reference point in the Atlanta area by locals and pilots.

The secret recipe

The Colonel's secret flavor recipe of 11 herbs and spices that creates the famous "finger lickin' good" chicken remains a trade secret.

The recipe, which includes exact amounts of each component, is written in pencil on a single sheet of notebook paper and signed by Sanders.

The recipe was locked in a filing cabinet with two separate combination locks. The cabinet also included vials of each of the 11 herbs and spices used.

Products

Menu items

This is a list of menu items sold at KFC.

Chicken

KFC's specialty is fried chicken served in various forms. KFC's primary product is pressure-fried pieces of chicken made with the original recipe. The other chicken offering, extra crispy, is made using a garlic marinade and double dipping the chicken in flour before deep frying in a standard industrial kitchen type machine.

Kentucky Grilled Chicken – This marinated grilled chicken is targeted towards health-conscious customers. It features marinated breasts, thighs, drumsticks, and wings that are coated with seasonings before being grilled. It has less fat, calories, and sodium than the Original Recipe fried chicken. Introduced in April 2009.

Wrapstar is a variant of the KFC Twister, consisting of chicken strips with salsa, cheese, salad, pepper mayonnaise and other ingredients, contained in a compressed tortilla.

Other products

In some international locations, KFC may sell hamburgers, pork ribs or fish. In the U.S., KFC began offering the Fish Snacker sandwich during Lent in 2006. The Fish Snacker consists of a rectangular patty of Alaskan Pollock on a small bun, and is the fifth KFC menu item in the Snacker category.

Chili Cheese Fries – By 2007, 2 former KFC/A&W Restaurants locations in Berlin and Cologne, Germany had reverted to KFC-only locations and the third location in Garbsen (by Hannover) was closed in 2005. The only remnant from the former A&W menu are the Chili Cheese Fries which were added to the systemwide KFC Germany menu.

Discontinued products

Tender Roast Chicken – This product was an offshoot of "The Colonel's Rotisserie Gold". Instead of whole and half birds, customers were given quarter roasted chicken pieces. For a time, customers could request chicken "original", "Extra Tasty Crispy", or "Tender Roast".

Extra Tasty Crispy (ETC) – Chicken much like the Extra Crispy served today, except ETC was prepared using chicken that had been soaking for 15 minutes in a special marinade machine. In the summer of 2007, KFC started marketing the chicken just as "Extra Crispy" without the marinade.

Nutritional value

KFC formerly used partially hydrogenated oil in its fried foods. This oil contains relatively high levels of trans fat, which increases the risk of heart disease. The Center for Science in the Public Interest (CSPI) filed a court case against KFC, with the aim of making it use other types of oils or make sure customers know about trans fat content immediately before they buy food.

In October 2006, KFC announced that it would begin frying its chicken in trans fat-free oil. This would also apply to their potato wedges and other fried foods, however, the biscuits, macaroni and cheese, and mashed potatoes would still contain trans fat. "If KFC, which deep-fries almost everything, can get the artificial trans fat out of its frying oil, anyone can," CSPI executive director Michael Jacobson said in a statement.

Advertising

KFC's logo used from 1997 until November 2006

Early television advertisements for KFC regularly featured Colonel Sanders licking his fingers and talking to the viewer about his secret recipe, and by the 1960s both the Colonel and the chain's striped bucket had become well-known. The bucket as product placement can be seen in the hands of both Annette Funicello and Dwayne Hickman in 1965's How to Stuff a Wild Bikini, and was also featured prominently in the 1968 Peter Sellers vehicle, The Party.

A KFC Take-Away Trailer located in Sargodha, Pakistan

International operations

Countries with KFC restaurantsKey:Blue: Countries currently with KFC restaurants

Criticism

Environmental concerns

KFC in the US has been accused by Greenpeace of a large destruction of the Amazon Rainforest, because the supply of soy used for chicken food that KFC receives from Cargill has been traced back to the European KFC. Cargill has reportedly been exporting soy illegally for several years. The Greenpeace organization researched the issue and brought it to the attention of the parent company YUM! Brands, Inc. The parent company denied the illegal operation, and said that their supply of soy is grown in parts of Brazil. Greenpeace has called on KFC to stop purchasing soy from Cargill, to avoid contributing to the destruction of the Amazon.

Pizza Hut

Pizza Hut (corporately known as Pizza Hut, Inc.) is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread.

Pizza Hut is a subsidiary of Yum! Brands, Inc. (the world's largest restaurant company) with approximately 34,001 restaurants, delivery/carry-out locations, and kiosks in 100 countries.

Currently based in Addison, Texas (a northern suburb of Dallas), Pizza Hut is relocating its headquarters to Legacy Office Park in nearby Plano when the lease on its current building, which it has occupied since 1995, expires on December 31, 2010.

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Concept and format

Pizza Hut store (with distinctive roof) in Athens, Ohio typical of U.S. Pizza Hut restaurants

"Pizza Hut Express" and "The Hut" locations are fast food restaurants. They offer a limited menu with many products not found at traditional Pizza Huts. These type of stores are often paired in a colocated location with a sibling brand such as Wing Street, KFC or Taco Bell, and are also found on college campuses, food courts, theme parks, and in stores such as Target.

HISTORY

The plaque on the first Pizza Hut building which was sometimes seen on the box. It was shown from 1970 to 1985.Main article: History of Pizza Hut

Pizza Hut was founded in 1958 by brothers Dan and Frank Carney in their hometown of Wichita, Kansas. When a friend suggested opening a pizza parlor, they agreed that the idea could prove successful, and they borrowed $600 from their mother to start a business with partner John Bender. Renting a small building at 503 South Bluff in downtown Wichita and purchasing secondhand equipment to make pizzas, the Carneys and Bender opened the first "Pizza Hut" restaurant; on opening night, they gave pizza away to encourage community interest. They chose the name "Pizza Hut" since the sign they purchased only had enough space for nine characters and spaces. Additional restaurants were opened, with the first franchise unit opening in 1959 in Topeka, Kansas. The original Pizza Hut building was later relocated to the Wichita State University campus.

Pizza Hut's prototype version of a restaurant (1958–1961) at Wichita State University. This was only used at four prototype Pizza Hut locations. There are only a few menu items on this version.

Traditionally, Pizza Hut has been known for its ambiance as much as pizza. Vintage "Red Roof" locations can be found throughout the United States, and quite a few exist in the UK and Australia. Even so, many such locations offer delivery/carryout service. This building style was common in the 1960s and 1970s. The name "Red Roof" is somewhat anachronistic now, since many locations have brown roofs. Dozens of "Red Roofs" have closed or been relocated/rebuilt. Many "Red Roof" branches have beer if not a full bar, music from a jukebox, and sometimes an arcade. In the 1980s, the company moved into other successful formats including delivery/carryout and the fast food "Express" model.

Products

Pizza Hut in Santiago, Chile.

Pizza Hut sells "Stuffed Crust" pizza, with the outermost edge wrapped around a coil of mozzarella cheese; "Hand-Tossed," more like traditional pizzeria crusts; "Thin 'N Crispy", a thin, crispy dough which was Pizza Hut's original style; "Dippin' Strips pizza", a pizza cut into small strips that can be dipped into a number of sauces; and "The Edge pizza," where the toppings nearly reach to the edge of the pizza. There was also formerly a crust that was not as thick as Pizza Hut's pan pizza, and not as thin as its thin crust. This crust was used on the Full House XL pizza and discontinued in 2007.

Buffalo wings

Depending on the individual restaurant size, Pizza Huts also may offer pasta dinners such as spaghetti and Cavatini – a mixture of Cavatelli (shells), Rotini (spirals), and Rotelle (wheels).

Pizza Hut Bistro concept location located in Indianapolis.

A new version of Pizza Hut pizza, named Pizza Mia which is lightly topped, was introduced in 2007. The product is aimed at the cost sensitive consumer segment and is priced similarly to the Domino's 555 deal, where each pizza is priced at five dollars if purchased in bulk of three or more. In comparison, a Pizza Hut medium sized, hand-tossed pepperoni pizza is internationally priced at $10.24 (Dallas, Texas 1/1/2009). The Pizza Mia comes in only one size (medium) and extra toppings range from $1.25 to $1.49. One slice of Pizza Hut pepperoni Pizza Mia weighs 83 grams, while one slice of Pizza Hut pepperoni hand-tossed pizza weighs 96 grams.

Pizza Hut recently (2010) came under fire when its supplier of palm oil, Sinar Mas, was exposed to be illegally slashing and burning the Paradise Forests of Indonesia to plant palm oil plantations. This act is driving native people off their land and forcing orangutans and Sumatran tigers to the brink of extinction.

Advertising

Long-time/former Pizza Hut logo (1970s–1999). Many older locations started with an earlier 1965 logo but were soon upgraded. Some locations still use this logo.

Pizza Hut's very first ad was "Putt Putt to Pizza Hut". It starts with a man apparently ordering take-out and driving his 1965 Mustang JR to Pizza Hut, while some of the townspeople start chasing him. He picks up his pizza and goes to his house, when all of the people who were

chasing him start eating all the pizza except the man who ordered it. Frustrated, he calls Pizza Hut again.

Until early 2007, Pizza Hut's main advertising slogan was "Gather 'round the good stuff", and was "Now You're Eating!" from 2008 to 2009. The advertising slogan is currently "Your Favorites. Your Pizza Hut." Pizza Hut does not have an official international mascot, but at one time, there were commercials in the United States called 'The Pizza Head Show.' These commercials ran from 1993 to 1997 and were based loosely on the Mr. Bill shorts from Saturday Night Live in the 1970s. The ads featured a slice of pizza with a face made out of toppings called 'Pizza Head'. In the 1970s Pizza Hut used the signature red roof with a jolly man named "Pizza Hut Pete". Pete was on the bags, cups, balloons and hand puppets for the kids. In Australia during the Mid to late 1990s, the advertising mascot was a delivery boy named Dougie, with boyish good looks who, upon delivering pizza to his father, would hear the catchphrase "Here's a tip: be good to your mother".

Pizza Hut is also advertised in anime such as Code Geass, Maria-sama ga Miteru, Darker Than Black and Toaru Kagaku no Railgun, though in the translated versions of Code Geass the logo was removed, leaving only the red roof logo.

As of October 2009, Pizza Hut is advertising its WingStreet brand on a nationwide basis, having met its internal requirement of 80% of stores having the product available.

Pasta Hut

Pasta Hut logo (2008–present)

On April 1, 2008, Pizza Hut in America sent emails to customers advertising that they now offer pasta items on their menu. The email (and similar advertising on the company's website) stated "Pasta so good, we changed our name to Pasta Hut!" The name change was a publicity stunt held in conjunction with April Fools' Day, extending through the month of April, with the company's Dallas headquarters changing its exterior logo to Pasta Hut. This name change was also used to promote the new Tuscani Pasta line and new Pizza Hut dine-in menu. The first Pasta Hut advertisement has the original Pizza Hut restaurant being imploded, and recreated with a sign saying "Pasta Hut" placed on the building.

In the UK, Pizza Hut has been criticized for the high salt content of its meals, some of which were found to contain more than twice the daily recommended amount of salt for an adult. The meats that consumers demand for pizza toppings (pepperoni, sausage, bacon, etc.) are, likewise, salty and fatty meats. There have also been concerns raised over food production practices as due to the high level of frozen produce being used.

Taco Bell

Taco Bell is an American chain of fast-food

restaurants based in Irvine, California. A subsidiary of Yum! Brands, Inc., they serve a variety of Tex-Mexfoods including tacos, burritos, quesadillas, nachos, other specialty items, and a variety of "Value menu" items. Taco Bell serves more than 2 billion customers each year in more than 5,800 restaurants in the U.S., more than 80 percent of which are owned and operated by independent franchisees.

The classic Taco Bell logo used from 1985 to 1994. It is still in use at many older Taco Bell locations.

Taco Bell's original restaurant design with its first logo sign in Wausau, Wisconsin. Demolished 5/4/10

Taco Bell's current restaurant design.

Taco Bell is an American restaurant chain based in Irvine, California. A subsidiary of Yum! Brands, Inc., it specializes in Mexican-style food and quick service.

Taco Bell serves tacos, burritos, quesadillas, nachos, other specialty items and a variety of "Value Menu" items.

Taco Bell serves more than 2 billion consumers each year in more than 5,800 restaurants in the U.S., of which more than 80 percent are owned and operated by independent franchisees.

History

Founding and growth

Taco Bell was founded by Glen Bell, a former Marine, who opened his first restaurant, named Bell's Drive-in, in San Bernardino, California at the age of 25. Over the next few years Bell owned and operates a number of restaurants in southern California including four called El Taco. Bell sold the El Tacos to his partner and built the first Taco Bell in Downey, California in 1962. Kermit Becky, a former Los Angeles police officer, bought the first Taco Bell franchise from Glen Bell in 1964 and located it in Torrance, California. The company grew rapidly and by 1967 the 100th restaurant opened at 400 South Brookhurst in Anaheim, California. In 1978 PepsiCo purchased Taco Bell from Glen Bell.

Taco Bell Express

In 1991, Taco Bell opened the first Taco Bell Express in San Francisco, California. This concept is a reduced-size restaurant with a limited menu (primarily items priced under $1), meant to emphasize volume. Taco Bell Express locations operate primarily inside convenience stores, truck stops, shopping malls, and airports.

Controversies

In November 2006, Taco Bell made local headlines when 22 customers were sickened by the E. coli bacteria. The bacteria was traced to three New Jersey restaurants. While some people were hospitalized, none were severely harmed.

In February 2007, Taco Bell again made headlines when a Taco Bell/KFC restaurant in Manhattan was overrun by rats; footage of the rodents scurrying about were shown on news shows around the globe. The location was closed by order of the Department of Health until the issues were resolved. The outbreak prompted the closure of several additional Taco Bell restaurants throughout the Northeastern United States.

In August 2010, Taco Bell was linked to two outbreaks of Salmonella. At least 155 people in 21 states became ill as a result of eating contaminated food.

Menu

Border Bell

In 1997, PepsiCo experimented with a new "fresh grill" concept, opening at least one Border Bell restaurant in Mountain View, California on El Camino Real (SR 82). In addition to a subset of the regular Taco Bell menu, Border Bell offered Mexican-inspired items like those available from Chevys Fresh Mex restaurants (then owned by PepsiCo), such as Chevys signature sweet corn tamalito pudding and a fresh salsa bar.

Reduction of trans fats

As of April, 2007, Taco Bell had switched to zero trans fat frying oil in all of its US single-branded locations.

Volcano Taco and Volcano Double Beef Burrito

Taco Bell revealed in June 2009 that it will be adding to its main menu the Volcano Double Beef Burrito and the Volcano Taco, a former limited-time item.

Cupcakes and Smoothies

It was reported in October 2009 that the chain has been testing smoothies, mini-snacks, and other items. A juice bar has been installed in some restaurants along with a display containing cupcakes and other snacks.

Advertising

Taco Bell's headquarters in Irvine, California

In March 2001, Taco Bell announced a promotion to coincide with the re-entry of the Mir space station. They towed a large target out into the Pacific Ocean, announcing that if the target was hit by a falling piece of Mir, every person in the United States would be entitled to a free Taco Bell taco. The company bought a sizable insurance policy for this gamble. No piece of the station struck the target.

In 2006, Taco Bell was a ESPN partner of its coverage of the 2006 FIFA World Cup.

In 2007, Taco Bell offered the "Steal a Base, Steal a Taco" promotion—if any player from either team stole a base in the 2007 World Series the company would give away free tacos to everyone in the United States in a campaign similar to the Mir promotion, albeit with a much higher likelihood of being realized. After Jacoby Ellsbury of the Boston Red Sox stole a base in Game 2, the company paid out this promotion on October 30, 2007. This promotion was used again in the 2008 World Series, when Jason Bartlett of the Tampa Bay Rays stole a base during Game 1 at Tropicana Field, which was paid out on October 28, 2008.

In an effort to promote their $2 Meal Deals, Taco Bell started a Facebook group in June 2010 to collect signatures on a petition that appeals to the Federal Reserve to produce more two-dollar bills.

In India

India's first Taco Bell outlet is in Mantri square mall, Bangalore.

United Kingdom

The United Kingdom was the first European country with a Taco Bell, although it remains extremely difficult for UK inhabitant to patronise a store. Yum! Brands announced that it is considering reopening Taco Bell locations in the United Kingdom as part of a large planned expansion into Europe, with trial outlets opening first in Spain in early 2009. Yum! is taking advantage of the recent recession which led to increasing sales at other fast food outlets, it also said that there is now a greater awareness of Mexican food in the UK and that it can be successful with improved menu offerings and marketing. The first new store opened at the Lakeside Shopping Centre on 28 June 2010. Taco Bell recently announced on Facebook that they will be opening a second store in Basildon at the end of November.

Dominican Republic

The Dominican Republic, Puerto Rico, Costa Rica, Canada, and Spain are the only countries where Taco Bell offers French fries. Having this product in 2 varieties: Fiesta Fries (Topped Fries in Spain) (Like Nachos Supreme, changing nachos for fries) and regular French fries.

Long John Silver's, Inc.

A typical meal from Long John Silver's. A platter with battered and fried fish, french fries, battered fried shrimp, hushpuppies and coleslaw

A co-branded KFC and Long John Silver's restaurant in Lafayette, Tennessee

A co-branded Long John Silver's and Taco Bell in Kent, Ohio

Long John Silver's, Inc. is a United States-based fast-food restaurant that specializes in seafood. The name and concept were inspired by Robert Louis Stevenson's book Treasure Island. Its headquarters are in Louisville, Kentucky.

History

The first restaurant was opened in 1969 in Lexington, Kentucky. (The original location, on Southland Drive just off Nicholasville Road, was previously a seafood restaurant named the Cape Codder, which accounts for the Cape Cod style of LJS’s early chain restaurants.) Until its bankruptcy in 1998, Long John Silver's was a privately owned corporation. The chain began as a division of Jerrico, Inc., which also operated Jerry's Restaurants, a chain of family restaurants which also began in Lexington, and was very similar to Big Boy restaurants. Jerry's was located in the Midwest and South. When the company was sold in 1989, the Long John Silver's concept had far outgrown the Jerry's chain. Most of Jerry's 46 remaining locations were converted to Denny's by the new owners, with a handful staying under the original name, usually because there was already an existing Denny's nearby. Only a dozen or so, now called Jerry's J-Boy Restaurants, are still open in Kentucky and southern Indiana. LJS stores were largely unaffected by this move. (Many original LJS franchisees were also operators of Jerry's locations.)

The restaurant, which has over 1200 units worldwide, is a division of Yum! Brands, Inc. The company purchased it from Yorkshire Global Restaurants, which originally acquired it from Fleet Boston Bank after its having gained control of the restaurants due to bankruptcy. Yum! originally combined many of the franchises' locations with its chain of A&W Restaurants, and most new Long John Silver's locations in the first few years after the acquisition were co-branded with A&W. Yum! announced in 2005 that it would expand the multi-brand concept and pair Long John Silver's with KFC, just as they had paired Taco Bell and Pizza Hut along with A&W, and Long John Silver's has since been paired with all of Yum!'s other chains. The parent corporation of the chain's Canadian franchises, which have no connection with A&W in Canada, is Priszm.

International operations

Australia

There was one Long John Silver's Store located in Australia, in Kings Park, a suburb of Sydney, NSW. The burgers and seafood varied from the American menu to make it a more classic Australian Menu, although still taking on 'A&W Root Beer' and its logo as a partner. In 2007, the restaurant was shut down due to poor sales. The restaurant still remains standing and vacant, and is quickly become dilapidated and somewhat of an eyesore.

Canada

Beginning in the late 1970s, a lone franchise operated four stores in the mid-southwestern area of Ontario. The stores were located in Kitchener, Cambridge, Guelph and Stratford. Their menus were broader than American stores of today as they included a small selection of salads as meals, some including boiled shrimp. The menu also included seafoods not offered today, such as clams, oysters, scallops, and "Peg Legs" (which were parts of chicken wings but named in keeping with the pirate theme). The stores also offered a limited selected of beer and wine. The design (Cape Cod style) of the stores was similar to American stores of that time period. By the late 1980s there was also a location in London, Ontario, but by the early 1990s some locations began to close and by the mid 1990s only a lone store in Waterloo was operating, which closed shortly thereafter.

In 2006, a store was opened by Yum! Brands in Woodbridge, Ontario, a northern suburb of Toronto, and a joint store with KFC, which only offered a partial LJS menu, was opened in Pickering Town Centre Mall, in Pickering, an eastern suburb of Toronto. These locations were closed within a year and two years, respectively, due to poor sales.

New Zealand

The New Zealand chain LJS Seafood is unrelated to Long John Silver's.

Singapore

There are currently 31 stores operating in Singapore, more than any other single city in the world.

United Kingdom

Long John Silver's broke into the United Kingdom market in 2006. They had one branch in Walsall near Birmingham. The restaurant however did not do particularly well becoming run down very quickly, which has stalled their expansion (though the UK is the largest consumer of fish and chips in the world, they also have the largest number of independent restaurants, therefore Long John Silver's had no foothold on the competition). The restaurant is now re-branded as a KFC.

CHAPTER 3

Company Analysis

Overview

Yum!'s strategy for leveraging diversity includes franchising and supplier diversity. Yum! supports minority entrepreneurship through its sponsorship of the National Minority Supplier Development Council and is a founding member of the National Minority Franchising Initiative, the International Franchise Association's Diversity Institute, and the Women's Franchise and Distribution Forum.

In addition to franchising and supplier diversity, Yum!'s diversity strategy includes employment, leadership development, and community involvement. Over 25 percent of Yum!'s annual corporate giving goes to support predominantly minority communities. Each year Yum! partners with our multicultural customers through high impact programs such as College Black Expos, KFC Pride 360, the NCLR Charter School Arts Grant, Organization of Chinese Americans (OCA) Youth and College Programs, the American Indian College Scholarship Fund, lead sponsorship of the National NAACP Youth and College Division, creation of the Hispanic Enterprise Hispana Leadership Summit, and a strategic partnership with National Urban League's Young Professionals and Urban Influence Magazine, among others.

Many of Yum! Brands' philanthropic efforts are focused on minority community giving and employee volunteerism. The Yum! Brands Foundation has committed approximately $1 million to the Louisville-based Muhammad Ali Center, an international cultural and educational institution, for the advancement of humanity worldwide and $250,000 for the creation of the Children's Educational Center as part of the Kentucky Center for African-American Heritage.

Yum! and its brands also have been committed to fighting hunger for more than a decade by donating $50 million of prepared food annually to the underprivileged in the United States. The company has been the primary sponsor of the Dare to Care Food Bank in Louisville, Kentucky, donating $1 million annually for the past seven years to feed 90,000 hungry children in underserved minority communities. In addition, last year Yum! Brands launched the world's largest private sector hunger relief effort, in partnership with the United Nations World Food Program and other hunger relief agencies. This effort raised $16 million for the World Food Program and other hunger relief organizations and helped save over 1.6 million people from starvation in remote corners of the world, where hunger is most prevalent.

SWOT ANALYSIS

SWOT AnalysisStrengthsA Diverse Customer BaseYum! Brands’ five different restaurant brands allowthe company to cater to almost any type ofcustomer. KFC offers fried and non-fried chickenproducts. Pizza Hut is a top competitor in pizzasales. Taco Bell specializes in Mexican-Stylefoods. Long John Silver serves seafood, and alsooffers chicken sandwich items. Also, A&W offersAmerican burgers, hot dogs, and their famous rootbeer floats. This wide array of products exhibits asignificant advantage over its top competitors likeMcDonalds, Wendy’s/Arby’s, and Burger King,who are not able to cater to such a diverse range oftastes for the consumer.Leading BrandsYum! Brands has established a leading marketposition with a portfolio of established brands andhigh levels of consumer acceptance. KFC, PizzaPizza Hut, Taco Bell, A&W, and Long John Silver’s arehousehold names that continue to contribute toYum! Brands’ increasing revenues year after year.KFC is the leader in the US chicken QSR segmentwith a 42% market share. Pizza Hut is the leader inthe US pizza QSR segment, with 14% market share.

Taco Bell is the leader in the US Mexican QSRsegment, with 52% market share. LJS is the leaderin the US seafood QSR segment; with 36% marketshare.xiv These statistics prove Yum! Brands’dominance among competitors and allowsmanagement to focus on sustainability.WeaknessesDeclining same store salesDeclining same store sales was a major weaknessfor Yum! Brands during 2009. Same store sales is ameasurement of the growth in sales of allrestaurants in operation for a minimum of one year.Worldwide same store sales decreased by 2% in2009, which can be attributed to a 3% decrease inChinese restaurants and a 5% decrease in USrestaurants. However, Yum! Brands is on therebound, posting Same Store Sales increases of 1%in the United States and 6% in China during 2010. xvOpportunitiesThe Chinese MarketYum! Brands 4th quarter earnings for 2010 reportedoverall sales growth of 6%., with 21% sales growthin China. KFC and Pizza Hut are currently in highdemand throughout China, and Yum! Brands plansto take advantage of the Chinese growth byinvesting millions more into the market by opening507 new restaurants in China during 2011. xviIncrease in Domestic Market ShareYum! Brands launched new marketing campaignsduring 2010 with the intent to increase its revenuesin the United States. KFC introduced a nation-widevalue menu introducing quality food at low prices.Pizza Hut successfully responded to competition byoffering $10 pizzas, which have since become astandard for in-store and delivery pizzas. Yum!Brands’ goal to decrease company ownership byfranchising its brands more has already proven to bean effective method of increasing profit margins,with plans to decrease company ownership to 5%for each KFC and Pizza Hut, down from 21% and18%, respectively.xviiThreatsInflation in ChinaChina’s rapid economic growth raises concernabout inflation in China. On April 17th, 2011,China’s central bank ordered the biggest banks to

set aside large cash reserves, the fourth time thisyear. Chinese inflation will cause food prices tosoar, as Chinese CPI rose to 5.4% in March, itssharpest increase in the past three years.

PROFITABLITY RATIOS AND CASH FLOW STATEMENT

Financial Summary

The company’s total revenue of $356 million or $0.74

per share for the fourth quarter of 2011, which was a 33%

increase compared to its revenue of the same quarter last

year.9 The increased revenue was mainly driven by the

substantial growth in its China division.

Products and Markets

Yum Brands is the one of the largest quick service

restaurants in the world. It mainly serves chicken,

mashed potatoes, pizzas, tacos, salads, burgers, hot dogs

and many others through the its three brands: KFC,

Pizza Hut and Taco Bell.

The company is operating in over 110 countries all over

the world. As the data indicates, Asia is the largest

market for the company, and this is mainly driven by the

profit generated in China.

Source: J.P. Morgan Estimates

By the end of 2011, Yum Brands still owns 27.2% of the

China based hot pot concept restaurant Little Sheep, and

it has obtained approval from the minister of commerce

of China to acquire another 66% of the shares of this

company.10 Little Sheep is a famous restaurant in China.

And we expect that once the acquisition is complete,

Yum Brands can produce even higher revenue growth.

Production and Distribution:

The brands within the U.S share one purchasing unit

called Unified Foodservice Purchasing Co-op, LLC,

which was solely created to locate the lowest price

supply for those companies. The brands operating

outside the U.S. use decentralized distribution systems, and Yum Brands has over 500 distribution centers in China alone. This could pose a potential threat to the supply of foods since it is harder to manage.

Balance Sheet of Yum! Brands

(In $)

PERIOD ENDING 26-Dec-09 27-Dec-08 29-Dec-07

Assets

Current Assets Cash And Cash Equivalents 353,000   216,000   789,000 Short Term Investments -   -  - Net Receivables 320,000   310,000   350,000

 Inventory 122,000   143,000   128,000 Other Current Assets 413,000   282,000   214,000 Total Current Assets 1,208,000   951,000   1,481,000

Long Term Investments 144,000   65,000   153,000 Property Plant and Equipment 3,899,000   3,710,000   3,849,000 Goodwill 640,000   605,000   672,000 Intangible Assets 462,000   335,000   333,000 Accumulated Amortization -   -   - Other Assets 544,000   561,000   464,000 Deferred Long Term Asset Charges 251,000   300,000   290,000

Total Assets 7,148,000   6,527,000   7,242,000

Liabilities Current Liabilities Accounts Payable 1,594,000   1,085,000   1,138,000 Short/Current Long Term Debt 59,000   25,000   288,000 Other Current Liabilities -  612,000   636,000 Total Current Liabilities 1,653,000   1,722,000   2,062,000

Long Term Debt 3,207,000   3,564,000   2,924,000 Other Liabilities 1,174,000   1,349,000   1,117,000 Minority Interest 89,000    -   - Total Liabilities 6,123,000   6,635,000   6,103,000  

Analysis of Balance Sheet

By this balance sheet it can be inferred that in 2008 company’s current assets were less than 2007 but company was concerned about its reputation and all things so current assets increased in 2009 again.

This same thing was with its total assets, so company worked hard and again it increases its total current assets. So it is a very good sign for any type of organization.

But as per we talk about the analysis of its liabilities, it is having very good sign. Because its liabilities were more in 2007 as compare to 2008 and 2009. If any company (organization) is having fewer liabilities as compare to its assets, so it is consider as a very good sign for the company.

So it is very good for Yum! Brands that it is having good financial position in the market.

One Year Stock Performance

News related with the Company (Yum! Brands)

New in Yum

Yum! Brands has appointed Gregg Dedrick to the post of president of its KFC U.S. division. Dedrick has worked with Yum! For 10 years, most recently serving as executive vice president of people and shared services. He replaces Cheryl Bachelder, who has resigned “to pursue other interests.”

Yum! Has also announced its sales for the four weeks that ended on Sept. 6, KFC reported a 6% decline in same-store sales compared to a year ago. Pizza Hut same-store sales grew 4%, while Taco Bell reported a 2% increase. Overall, Yum’s U.S. same-store sales for the period were even compared to a year ago.

Yum plans new products, promotions

Pizza Hut, Taco Bell, KFC to unveil new flavors, menu lines

By Susan Spielberg

LOUISVILLE, K.Y. – Yum! Brand Inc., which this month reported flat U.S. revenues of $1.7 billion for the 4th quarter, plans to drive domestic sales at its Pizza Hut, KFC and Taco Bell chains with new products in 2005, including a highly spiced new variety for its struggling chicken chain.

While Yum is focusing on menu innovations for the 6,300 domestic units of Pizza Hut, product upgrades also are planned for the 5,030 U.S. branches of Taco Bell, which began the year with a new chicken enchilada burrito item.

The emphasis on “highly flavored” fried chicken at KFC’s 5,450 domestic branches will come as the chain launches a test of a “high-quality,” lower-period product in March.

Our approach to building a talented, diverse workforce is built on our major business principles. These principles emphasize the importance of investing in associate recruitment and advancement, both for individual development and for our overall success as a business.

As a global company with a diverse and ever-changing workforce, we face significant challenges. For example, our rapid growth in emerging markets like India and Russia requires us to adapt our policies to these markets, and to learn from our new partners. Building a diverse foundation at all of our brands gives us a competitive edge and helps us operate as a local business in international markets.

Part of our growth strategy will be to ensure that our leadership team, company workforce and culture are as diverse as our customers around the world.