Pizza Hut 2001 Annual Report Download - page 7

it fails because we stand for just one thing.
Let’s face it, no one is waiting with bated breath for a
Taco Bell burger or Pizza Hut breakfast. But consumers
do want more choice, and what we’ve proven is that
consumers love the idea of accessing two brands in the
same restaurant — multibranding.
Combinations like KFC-Taco Bell and Taco Bell-
Pizza Hut enable us to add $100,000 to $400,000 per
unit in annual sales — driving a quantum improvement
in unit economics. Right now 5% of our assets, over
1,500 worldwide restaurants, are multibranded, gener-
ating nearly $1.5 billion in annual system sales.
Given these outstanding results, in addition to
Tricon brands, our vision is to look for other multibrand
partners and create our own multibrand concepts.
Our goal is to ultimately offer two brands in the
overwhelming majority of our restaurant locations.
That’s why KFC has developed a new concept called
WingWorks, featuring a wide assortment of flavored
chicken wings. And that’s why we have secured
licensing agreements with A&W and Long John Silver’s
in 2000 and Backyard Burgers in 2001.
Because of the significant sales increases we are
generating with multibranding, we are remodeling our
existing asset base and achieving great returns. We
are also opening high-return new restaurants in trade
areas that used to be too expensive or did not have
enough population to allow us to go to
market with one brand.
We intend for multibranding to
unlock significant shareholder value for
years to come, providing a competitive
advantage that is truly changing the
shape of our company.
OUR VISION — TRICON
GLOBAL TO YUM! BRANDS It seems like just yesterday
when we began with three leading brands, or “icons”.
We named the company “Tricon” to reflect that. Now,
our business has evolved as we multibrand and explore
other branded partnerships to drive multibranding
leadership. To this end, on the day this Annual Report is
going to the printer, we have announced that we have
signed a definitive agreement to acquire Long John
Silver’s and A&W All-American Food Restaurants, which
are owned by Yorkshire Global Restaurants. This agree-
ment is subject to regulatory approval and other
customary closing conditions, and is expected to close by
the end of May.
Long John Silver’s, with 1,200 U.S. and 25 inter-
national restaurants, is the quick service restaurant
seafood leader. A&W, with 780 U.S. and 190 interna-
tional restaurants, is an all-American brand with a great
heritage. It offers pure-beef hamburgers and hot dogs,
along with its signature root beer float. Together, these
brands bring nearly $1.1 billion in system sales.
This acquisition is based on proven Long John
Silver’s and A&W multibrand test results with both KFC
and Taco Bell. Our customers love the
combinations and more choices. As a
result, we have achieved significant
increases in average unit volumes and profits.
We’re convinced this acquisition strengthens
our business in every
way possible, conser-
vatively more than
doubling the multi-
branding opportunities
we have in the U.S.
5
Tricon U.S. Average
Unit Volumes
vs. McDonald’s
KFC
Pizza Hut
Taco Bell
McDonald’s
$865
$724
$890
$1,647
We are the world’s largest multibrander
with over 1,500 co-branded restaurants
worldwide that generate nearly $1.5
billion in annual system sales.