Multibranding - Yum!
Multibranding - Yum!
Multibranding - Yum!
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
4.<br />
We are more confident than ever that multibranding<br />
is potentially the biggest sales and profit driver in the<br />
restaurant industry since the drive-thru window.<br />
us more confident than ever that multibranding is potentially the biggest sales and profit driver<br />
in the restaurant industry since the introduction of the drive-thru window.<br />
We started with combinations of KFC/Taco Bell and Taco Bell/Pizza Hut Express. We learned that<br />
we were able to add significant incremental average sales per unit, dramatically improving our<br />
unit cash flows. Our franchisees then pioneered multibrand combinations of KFC and Taco Bell<br />
with Long John Silver’s, the country’s leading seafood restaurant, and A&W All American Food,<br />
which offers pure-beef hamburgers and hot dogs along with its signature Root Beer Float. Based<br />
on outstanding customer feedback and results, we acquired Long John Silver’s and A&W in<br />
2002. With this acquisition we tripled our multibranding potential in the U.S.<br />
We can now open high return new restaurants in trade areas that used to be too expensive or<br />
did not have enough population density to allow us to go to market with one brand. With multibranding,<br />
we believe we can take both KFC and Taco Bell to 8,000 units in the U.S. compared<br />
to the over 5,000 each we have today. As we expand, we expect to take volumes to an average<br />
of at least $1.1 million per restaurant.<br />
One of the most exciting learnings we had in 2003, is that Long John Silver’s is performing<br />
even better than expected …we call it our hidden jewel. That’s because there is no national<br />
fish competitor in the QSR industry and consequently there is pent-up consumer demand for<br />
seafood. In addition to outstanding sales results with KFC and Taco Bell, we have created a<br />
Long John Silver’s/A&W combination that allows us to expand into “home-run” trade areas<br />
where we know demand is high and KFC and Taco Bell are already there. The results have led<br />
us to a “fish first” strategy with the goal of making Long John Silver’s a national brand.<br />
I’m also pleased to report that we have created on our own a new multibrand concept called<br />
WingStreet, which is a tasty line of flavored bone-in and bone-out chicken wings. We believe that<br />
WingStreet can be an ideal multibrand partner for Pizza Hut’s delivery service. Initial customer<br />
response is promising. We also acquired Pasta Bravo, a California fast casual chain with an<br />
outstanding line of pastas at great value, to be a partner brand with Pizza Hut’s traditional<br />
dine-in restaurants. Franchise testing is underway. We are confident multibranding will be every<br />
bit as successful at Pizza Hut as it has been for our other brands.<br />
In last year’s report, I stated that the biggest multibranding challenge is building the operating<br />
capability to successfully run these restaurants. That’s still a fact. With branded variety comes<br />
complexity. However, we have structured and invested to drive execution and it’s paying off.<br />
We now have a fully dedicated team of operating experts who have improved back of house<br />
Top: The popularity of the Long<br />
John Silver’s brand grew in 2003<br />
as it became the partner-of-choice<br />
in <strong>Yum</strong>!’s new Multibrand restaurants.<br />
This year, <strong>Yum</strong>! has adopted<br />
a “fi sh fi rst” strategy of using the<br />
Multibrand development concept to<br />
get Long John Silver’s distribution up<br />
to at least 3,000 units and make it a<br />
national brand.<br />
Bottom: <strong>Multibranding</strong> offers our<br />
customers more choice and convenience<br />
by bringing together two of<br />
our great brands under one roof.