Oligopoly brief: Yum! Brands
Yum! Brands is the #2 fast food company on the world, after McDonalds. The US-based company, formerly known as Tricon Global Restaurants is worldwide reach with three key franchises: KFC (formerly Kentucky Fried Chicken), Pizza Hut, and Taco Bell. All told, there are over 33,000 Yum! restaurants in over 100 countries, more than there are McDonalds locations (30,000).
Yum! Has an income of $8.3 billion a year. It owns about 1/4 of its stores, and franchises the rest. The three main chains are the leaders in their respective segments. In addition to the big three, the company also owns Long John Silver seafood restaurants and A&W All-American restaurants. It is also prototyping an Asian fast food brand, East Dawning.
Tricon began life as a spin-off form Pepsico in 1997. The thought was that the returns were lower in the restaurant business that Pepsi had acquired over the previous decades. In 2002, The spin-of has been beneficial for both entities. Tricon changed its name to the comical name Yum! Brands, which was based on its stock exchange symbol (YUM).
Yum! may well have a bigger future than McDonalds, which has been unable to establish a second restaurant brand in another food style. Yum! is expanding rapidly in the Chinese market, where chicken is far more popular than burgers. According to a Salon.com article ( "Demand for KFC Soaring in China", 1/15/2004), there are over 1,200 outlets in the country, expanding by 250 a year.
Sam Su, president of Yum's China division, called China ''the ultimate marketplace." He predicted that as the Chinese economy grows, it will someday surpass the number of KFC restaurants in the United States. In many parts of China, the local municipal governments actually view the arrival of a KFC as a sign of the city coming of age."
The company is also opening Pizza Hut and Taco Bell stores in China though at a more gradual pace.
Yum Brands chains
