Pizza Hut 2011 Annual Report Download - page 108

4
Restaurant Concepts
Most restaurants in each Concept offer consumers the ability to dine in and/or carry out food. In addition, Taco Bell and KFC
offer a drive-thru option in many stores. Pizza Hut offers a drive-thru option on a much more limited basis. Pizza Hut and, on a
much more limited basis, KFC offer delivery service.
Each Concept has proprietary menu items and emphasizes the preparation of food with high quality ingredients, as well as unique
recipes and special seasonings to provide appealing, tasty and attractive food at competitive prices.
The franchise programs of the Company are designed to assure consistency and quality, and the Company is selective in granting
franchises. Under standard franchise agreements, franchisees supply capital – initially by paying a franchise fee to YUM,
purchasing or leasing the land, building, equipment, signs, seating, inventories and supplies and, over the longer term, by reinvesting
in the business. Franchisees then contribute to the Company’s revenues through the payment of royalties based on a percentage
of sales.
The Company believes that it is important to maintain strong and open relationships with its franchisees and their representatives. To
this end, the Company invests a significant amount of time working with the franchisee community and their representative
organizations on all aspects of the business, including products, equipment, operational improvements and standards and
management techniques.
The Company and its franchisees also operate multibrand units, primarily in the U.S., where two or more of the Concepts are
operated in a single unit.
Following is a brief description of each Concept:
KFC
• KFC was founded in Corbin, Kentucky by Colonel Harland D. Sanders, an early developer of the quick service food
business and a pioneer of the restaurant franchise concept. The Colonel perfected his secret blend of 11 herbs and spices
for Kentucky Fried Chicken in 1939 and signed up his first franchisee in 1952.
• KFC operates in 115 countries and territories throughout the world. As of year end 2011, KFC had 3,701 units in China,
8,920 units in YRI and 4,780 units in the U.S. Approximately 79 percent of the China units, 11 percent of the YRI units
and 10 percent of the U.S. units are Concept-owned.
• As of year end 2011, KFC was the leader in the U.S. chicken QSR segment among companies featuring chicken-on-the-
bone as their primary product offering, with a 39 percent market share in that segment, which is over twice as large as
that of its closest national competitor. (Source: The NPD Group, Inc./CREST®, year ending December 2011, based on
consumer spending)
• KFC restaurants across the world offer fried and non-fried chicken products such as sandwiches, chicken strips, chicken-
on-the-bone and other chicken products marketed under a variety of names. KFC restaurants also offer a variety of side
items suited to local preferences and tastes. Restaurant decor throughout the world is characterized by the image of the
Colonel.
Pizza Hut
• The first Pizza Hut restaurant was opened in 1958 in Wichita, Kansas, and within a year, the first franchise unit was
opened. Today, Pizza Hut is the largest restaurant chain in the world specializing in the sale of ready-to-eat pizza products.
• Pizza Hut operates in 97 countries and territories throughout the world. As of year end 2011, Pizza Hut had 764 units in
China, 5,383 units in YRI and 7,600 units in the U.S. All of the China units and approximately 11 percent of the YRI
units and 6 percent of the U.S. units are Concept-owned.
• Pizza Hut operates in the delivery and casual dining segments around the world. Outside of the U.S., Pizza Hut often
uses unique branding to differentiate its delivery and casual dining businesses.
• As of year end 2011, Pizza Hut was the leader in the U.S. pizza QSR segment, with a 15 percent market share in that
segment. (Source: The NPD Group, Inc./CREST®, year ending December 2011, based on consumer spending)
Form 10-K