Global Brands

KFCFounded 50 years ago as Kentucky Fried Chicken

Today has ~ 5,000 U.S. restaurants; ~ 6,000 abroad

• 158 franchises in Indonesia, world’s largest Muslim nation

• KFC in more than 80 countries, including Japan, Australia, Egypt, Mexico, Malaysia, and Swaziland

• Now 1,100 stores in China

Global Brands

YUM! Brands (formerly Tricon) committed to international growth

Since formation (1997, Pepsi spinoff), has opened 5,100+ restaurants; 3,200 of those have been abroadPlans to open 1,000+ stores/yr overseas for foreseeable future30,000+ outlets in 100+ countries, most of any restaurant Co in world

Global BrandsYUM! can’t just open restaurants based on U.S. model and expect success

Has to adapt to local tastes, negotiate changing cultural and political climates

• Japan: KFC sells tempura crispy strips• No. England: stresses gravy and potatoes• Thailand: offers fresh rice w/soy or sweet chili sauce• Holland: potato-and-onion croquette• France: pastries in addition to chicken• China: chicken gets spicier farther inland; spinach, egg, and tomato

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“If it’s only an American brand without a regional appeal, it’s going to be difficult to market.”

Global Brands

Key to YUM!’s revival in England was willingness of Co to take more control over franchises

Part of trick for any large franchise operator is to allow local flexibility while maintaining quality control and central marketing message

YUM! shut down franchises that didn’t meet Co standards, introduced new products, established Co-owned restaurants in France, Holland, Germany to serve as models

Global BrandsChinese situation differs, to some extent

KFC is most recognized foreign brand in China, ahead of Coke and McDonald’s540 KFCs (now 1,100), 65 Pizza Huts in 130 cities (even though cost of KFC value meal = 6 hrs average pay)KFC particularly adept at wooing children

• Kid’s meals, inside playgrounds• Marketing: “Chicky” is friendly chicken character created by

KFC in Asia; hugely popular Source: Fortune, 11/26/01; Wall Street Journal, 8/5/04