Yum sev­ers China

Daily Freeman (Kingston, NY) - - BUSINESS -

Yum Brands, the par­ent of KFC, Pizza Hut and Taco Bell, is just weeks away from jet­ti­son­ing its trou­bled China unit and hopes the move cuts down on volatil­ity and boosts growth.

The fast-food chain op­er­a­tor de­cided last year to cut its China op­er­a­tions fol­low­ing bad public­ity con­nected to poor food han­dling from a for­mer sup­plier. Trou­ble mar­ket­ing Pizza Hut added to the woes, which in­cluded dou­ble-digit declines in res­tau­rant sales for sev­eral quar­ters.

Look­ing ahead, the com­pany will start to fo­cus on be­com­ing more of a fran­chiser. It owns the ma­jor­ity of its restau­rants in China and fran­chises more through­out the rest of the world. It hopes to boost its fran­chise pres­ence fol­low­ing the exit from China while strength­en­ing its Taco Bell brand.

Yum CEO Greg Creed has noted the en­cour­ag­ing per­for­mance of KFC and Taco Bell in the U.S., de­spite the “slug­gish” trends in the fast-food in­dus­try.

The com­pany has said the new struc­ture will yield lower risk. It says key el­e­ments will in­clude build­ing brands through fran­chises, a leaner struc­ture and cham­pi­oning the cus­tomer ex­pe­ri­ence.

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