Yum! Brands Reached 53,424 Restaurants in 2021, With China Accounting for 26% of KFC Units

This is an English adaptation of a FoodBud historical article originally published on March 10, 2022.

After Yum! Brands acquired fast-casual chain Habit Burger Grill in 2020 for $375 million, with total cash consideration of $408 million, its brand portfolio included KFC, Pizza Hut, Taco Bell and Habit Burger Grill.

According to Yum! Brands' latest financial report, the company ended 2021 with 53,424 restaurants across 157 countries and regions. Franchised restaurants represented 98% of the system. During the year, Yum! opened 4,180 gross new units and added 3,057 net new restaurants.

System sales reached $58.19 billion in 2021. Digital sales were $22 billion, up about 25% year on year. By the end of 2021, more than 45,000 Yum! restaurants offered delivery, also up more than 25%.

Revenue for the year was $6.58 billion, up 16%, while net income was $1.575 billion, up 74%.

Workforce and Franchise Structure

As of December 31, 2021, Yum! Brands and its subsidiaries employed 36,000 people: about 23,000 in the United States and about 13,000 outside the United States. In the U.S., 90% of employees worked in restaurants; outside the U.S., the figure was 85%, with the remainder in support roles. In the U.S., 90% of employees were part-time, and about 50% had been with the company for less than one year.

Yum! had about 1,500 franchisees under franchise agreements. Among more than 52,000 franchised stores, about 30% operated under area franchise strategic partnerships, including 10,800 stores in mainland China.

In October 2016, Yum China was spun off from Yum! Brands and listed independently, becoming Yum! Brands' largest franchisee. Yum China continued to pay Yum! Brands 3% of system sales as an exclusive agency fee. In 2021, franchise revenue from the China market was $297 million.

Brand Footprint

As of December 31, 2021, KFC had 26,934 restaurants worldwide and generated $31.37 billion in system sales for the year. China accounted for 26% of KFC restaurants.

Pizza Hut had 18,381 restaurants and generated $12.96 billion in system sales. China accounted for 16% of Pizza Hut restaurants.

Taco Bell had 7,791 restaurants and generated $13.28 billion in system sales. Habit Burger Grill had 318 restaurants and generated $590 million in system sales.

Investment and Acquisition Activity

In 2020, Yum! Brands obtained an approximately 5% stake in Devyani, an Indian franchisee operating KFC and Pizza Hut in India. The stake was valued at about $31 million at the time.

This followed KFC India transferring all 61 of its restaurants to Devyani, a step in Yum!'s shift away from capital-intensive operations and toward converting those restaurants into an equity position in the franchisee.

Devyani went public in August 2021. For the year ended December 31, 2021, Yum! recognized a $87 million pre-tax investment gain from the stake, whose fair value was $118 million.

Yum! Brands also invested in delivery platform Grubhub. In April 2018, it bought 2.8 million shares of Grubhub common stock for $200 million. By September 2020, Yum! had sold all of its Grubhub shares, generating $206 million in proceeds.

In September 2021, Yum! completed its acquisition of Dragontail Systems for $66 million in cash consideration. Dragontail's AI-based technology automates kitchen workflow and links it with driver dispatch, while also allowing customers to track orders.

The platform was intended to improve delivery across Yum!'s brands, especially Pizza Hut's in-house delivery system. It also integrated with third-party delivery operators. The source noted that similar order-tracking technology had long been used by Pizza Hut competitor Domino's.

Dragontail Systems had already been deployed across 2,800 KFC and Pizza Hut restaurants in 21 markets.

In late March 2021, Yum! acquired Tictuk Technologies, an ordering and marketing platform based in Tel Aviv, Israel. In the same month, it also acquired consumer-insights company Kvantum. Since the first-quarter 2021 acquisition of Tictuk, chat-based ordering through Tictuk had been deployed in nearly 2,000 stores, an increase of about 60%.

Note: IPO, investment and financial figures are historical and reflect the source article's 2021 reporting context.