Retailing, Franchising, and Consumerism Business Intelligence in China

Yum Separates China Businesses

The world's leading food and beverage group Yum! Brands, Inc. announced that the company will separate its China businesses.

With this move, Yum's China businesses will become an individual company that is independent from the group's global businesses, which is rare for an international group.

In the future, Yum China will become the largest franchisee of Yum Group, operating KFC, Pizza Hut, and Taco Bell brands in China. The separation is expected to finish at the end of 2016.

Greg Creed, chief executive officer of Yum Group, said that the separation allows the two independent companies to better focus on their respective business advantages and unite their respective resources.

According to Yum Group, the separated Yum China has great investment capacity and development opportunity. Yum China does not have heavy debt burden and it is financially available to invest in new businesses. In 2014, Yum China's income reached USD6.9 billion and it has sufficient cash flow. Yum Group believes with the rising of Chinese middle class, Yum China will have the opportunity to expand from the current 6,900 restaurants to over 20,000 restaurants in this marketplace.

However, the new development blueprint did not mention the acquired Little Sheep and the self-developed East Dawning.

Image Credit: Jimmy Tran

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