Pizza Hut 2009 Annual Report Download - page 99

8
Trademarks and Patents
The Company and its Concepts own numerous registered trademarks and service marks. The Company believes that
many of these marks, including its Kentucky Fried Chicken®, KFC®, Pizza Hut®, Taco Bell® and Long John Silver’s®
marks, have significant value and are materially important to its business. The Company’s policy is to pursue registration
of its important marks whenever feasible and to oppose vigorously any infringement of its marks. The Company also
licenses certain A&W trademarks and service marks (the “A&W Marks”), which are owned by A&W Concentrate
Company (formerly A&W Brands, Inc.). A&W Concentrate Company, which is not affiliated with the Company, has
granted the Company an exclusive, worldwide (excluding Canada), perpetual, royalty-free license (with the right to
sublicense) to use the A&W Marks for restaurant services.
The use of these marks by franchisees and licensees has been authorized in KFC, Pizza Hut, Taco Bell, LJS and A&W
franchise and license agreements. Under current law and with proper use, the Company’s rights in its marks can generally
last indefinitely. The Company also has certain patents on restaurant equipment which, while valuable, are not material to
its business.
Working Capital
Information about the Company’s working capital is included in MD&A in Part II, Item 7, pages 24 through 58 and the
Consolidated Statements of Cash Flows in Part II, Item 8, page 62.
Customers
The Company’s business is not dependent upon a single customer or small group of customers.
Seasonal Operations
The Company does not consider its operations to be seasonal to any material degree.
Backlog Orders
Company restaurants have no backlog orders.
Government Contracts
No material portion of the Company’s business is subject to renegotiation of profits or termination of contracts or
subcontracts at the election of the U.S. government.
Competition
The retail food industry, in which the Company competes, is made up of supermarkets, supercenters, warehouse stores,
convenience stores, coffee shops, snack bars, delicatessens and restaurants (including the QSR segment), and is intensely
competitive with respect to food quality, price, service, convenience, location and concept. The industry is often affected
by changes in consumer tastes; national, regional or local economic conditions; currency fluctuations; demographic
trends; traffic patterns; the type, number and location of competing food retailers and products; and disposable purchasing
power. Each of the Concepts compete with international, national and regional restaurant chains as well as locally-owned
restaurants, not only for customers, but also for management and hourly personnel, suitable real estate sites and qualified
franchisees. In 2009, the restaurant business in the U.S. consisted of about 945,000 restaurants representing
approximately $566 billion in annual sales. The Company’s Concepts accounted for about 2% of those restaurants and
about 3% of those sales. There is currently no way to reasonably estimate the size of the competitive market outside the
U.S.
Form 10-K