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How Yum! Brands Is Expanding Its Business

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Unit growth

By the end of 4Q17, Yum! Brands (YUM) operated 45,804 restaurants, which included 21,487 KFC restaurants, 16,748 Pizza Hut restaurants, and 6,849 Taco Bell restaurants. In the last 12 months, the company added net 1,409 units. At the end of 2017, Yum! Brands had 97% franchised restaurants. It’s focusing on increasing the unit count of franchised restaurants to 98% by the end of 2018.

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KFC

By the end of 2017, KFC operated 20,819 franchised restaurants and 668 company-owned restaurants. In the last 12 months, the brand increased the unit count of its franchised restaurants by 1,583, while the unit count of company-owned restaurants declined 739 units. Of the 1,271 newly opened restaurants, 1,042 units were in emerging markets.

Pizza Hut

By the end of 2017, Pizza Hut operated 16,748 restaurants with 16,588 franchised restaurants and 160 company-owned restaurants. In the last 12 months, the brand increased the unit count of its franchised restaurants by 717, while the unit count of company-owned restaurants declined 389 units. During the same period, the company opened 1,047 units with 826 new international restaurants in 77 countries.

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Taco Bell

The Taco Bell brand operated 6,849 restaurants at the end of 2017 with 6,196 franchised restaurants and 653 company-owned restaurants. In the last 12 months, the brand added 469 franchised restaurants, while the unit count of company-owned restaurants declined 232 units. During the same period, the brand opened 314 units with 77 units in international markets.

Peer comparisons

During the same period, McDonald’s (MCD) and Chipotle Mexican Grill (CMG) increased their unit counts by 342 units and 158 units, respectively.

Next, we’ll look at analysts’ revenue expectations for 2018.

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