Movers & Shakers is a new series by Chain Store Guide; spotlighting the people who have made an impact on the retail & foodservice industries. Each month, we will highlight their accomplishments and contributions.

Yum! Brands: A Modern Dynasty

Have you ever been driving down the road unsure of what to get for dinner that night? You keep driving and pass a Pizza Hut, a KFC and then finally you see that iconic neon-lit bell emblem; Taco Bell. It might come as a surprise to some that all three choices would from the world’s largest restaurant company; Yum! Brands.

From left to right: The Yum! Brands current CEO Greg Creed & COO and President, David Gibbs.

With over 48,000 worldwide locations Yum! Brands isn’t just a restaurant company; it’s a modern era dynasty. Like the Roman Empire before it, all great dynasties are helmed by courageous leaders; champions of the sword, or in this case, the fork. The Yum! Brands of today was truly brought to life by the combined efforts of two men; current CEO Greg Creed & COO and President, David Gibbs. With the recent announcement of Mr. Creed’s retirement and Mr. Gibb’s appointment as new CEO January 1st; it’s time to reflect on what this partnership did for the company and what avenues it has opened up for the future.

It seemed as if nobody was immune to the effects of the Great Recession; not even this new age restaurant dynasty. Creed and Gibbs frantically thought of a way to improve their company’s financial stature and in 2016 that idea came into fruition. Though perhaps not a ‘revolutionary’ idea, theirs was certainly ‘evolutionary’ to bring Yum! Brands into its next chapter. The two collaborated on a plan in which they would sell off the majority of the company owned stores in order to reduce capital spending and make the business more risk adverse, paving the path for future growth.

In 2015 Yum! Brands had: 8,705 company owned units, 33,983 franchised units, for a total of 42,688 locations across their three brands. That number the year after? In 2016 Yum! Brands was down to 2,859 units and is currently sitting at under 900 company owned units in 2019.

When examining the chart below we can see that from 2009-2012 Yum’s net income ballooned by $500 million before swiftly retracting down by that same amount in 2013 and plateauing in the 2013-2014 period. This brings us to the standout year; 2016. The same year that Creed and Gibbs plan came into place we see net income rise to $1.64B, up from $1.28B year-over-year.

We would be remiss not to point out that Creed was hired in January of 2015; a period right after Yum’s visually ‘stunted’ growth. That’s not to say he was new to the scene as he had been with the company for over two decades at this point. What this does illustrate though, is the impact that one employee and their vision can have to help transform a company.

Essentially what this refined style of ownership did was allow Yum! to focus on the macro level experiences of their brand and build something that they could control from the top down while not necessarily worrying about the day-to-day operations of every individual store. By adapting a model that allows them to focus on the big picture, Yum! was able to devote more time and resources to creating branding experiences or limited time offers such as their wildly successful ‘Nacho Fries’.

Not every brand can do what Yum! did. It takes special concepts and a brand loyalty that can take decades to establish. Perhaps it’s a special item that you can’t get anywhere else or maybe a pledge to only use humanely –sourced ingredients; in Yum’s case it may all relate back to a hot sauce packet with a clever saying on it. The die-hard brand loyalty of Yum’s Taco Bell fans can be perfectly illustrated with the announcement of their ‘Taco Bell Resort’ back a couple months ago; a one weekend only marketing promotion that sold out in only two minutes.

There are few other brands that could create such a fervor and brand loyalty such as this but it is worth noting that another concept has adopted a similar model albeit on a smaller scale; Chick-fil-A. Chick-fil-A uses a similar franchisee model, is closed on Sundays and yet has still managed to become the third-largest restaurant chain in the U.S. by system-wide sales. While it may not work for all companies, it seems that a few have accrued great success from this model.

With great power, comes a greater hunger. That desire to build an empire and watch it flourish for years to come. What Greg Creed and David Gibbs have built at Yum! over the past few years is a testament to their vision and business prowess. The positioning they have put their brands in makes one both sentimental to see Mr. Creed go and yet, at the same time, intrigued and excited to see what’s next for the company when Mr. Gibbs takes the helm at the beginning of the new year. We have no doubt that our taste buds will be happy for years to come.