KFC’s Largest Market Was China in Q2 2022, While Pizza Hut Remained U.S.-Led

This is an English adaptation of a FoodBud historical article originally published on August 12, 2022.

In early August 2022, Yum! Brands reported second-quarter figures for its global portfolio. For the quarter ended June 30, 2022, KFC, Pizza Hut, Taco Bell and Habit Burger Grill together operated more than 53,000 restaurants: 987 company-operated units and 52,363 franchised units. About 98% of the system was run by franchisees.

Yum! Brands generated total revenue of $1.636 billion in Q2 and net income of $224 million. Digital sales approached $6 billion for the quarter.

From China, Yum! Brands collected $61 million in franchise-related fees: $48 million from KFC and $13 million from Pizza Hut. The article notes that Yum! Brands charges Yum China a 3% exclusive-agent fee on KFC and Pizza Hut transaction volume.

Yum China and Yum! Brands had been in dispute over whether delivery revenue should be included in the royalty base. The disputed fees totaled about $4 million for the period ended June 30, 2022. Yum China was pursuing legal proceedings, but paid the amount under protest.

KFC

KFC had 26,521 restaurants in Q2 2022, with 99% franchised. Systemwide sales reached $7.25 billion.

By systemwide sales, China remained KFC’s largest market, followed by the United States.

Pizza Hut

Pizza Hut had 18,591 restaurants, also with 99% franchised. Q2 systemwide sales were $3.04 billion, down 3% year on year.

Pizza Hut’s largest market was the United States, accounting for 43% of systemwide sales. China accounted for 16%.

Taco Bell

Taco Bell delivered Q2 systemwide sales of $3.51 billion, up 10% year on year, with 7,900 restaurants. Outside the United States, international systemwide sales grew 30%.

During the quarter, Taco Bell franchisee Border Foods opened Taco Bell Defy, a digitally enabled store model designed to improve restaurant efficiency.

Related FoodBud Coverage Mentioned

The original archive item also pointed readers to earlier FoodBud articles on Yum China’s Q2 net profit decline of 54%, its new retail business target of RMB 1 billion for the year, Q1 new retail sales of RMB 260 million, and a three-year target of 225 Taco Bell stores.

Note: forward-looking targets and quarterly figures above are historical, from the 2022 article.