Full Description

YUM! Brands, Inc. (YUM), incorporated in 1997, is a quick service restaurant (QSR) with over 36,000 units in more than 110 countries and territories. Through the five concepts of KFC, Pizza Hut, Taco Bell, LJS and A&W (the Concepts), the Company develops, operates, franchises and licenses a worldwide system of restaurants, which prepare, package and sell a menu of food items. The Company either operates units or they are operated by independent franchisees or licensees under the terms of franchise or license agreements. In addition, the Company owns non-controlling interests in Unconsolidated Affiliates in China who operate similar to franchisees. YUM’s business consists of three segments: United States, YUM Restaurants International (YRI) and the China Division. The China Division includes mainland China (China), Thailand and KFC Taiwan, and YRI includes the remainder of its international operations.

During the fiscal year ended December 27, 2008 (fiscal 2008), the Company had approximately 20,000 system restaurants in the United States. The International Division, based in Dallas, Texas, comprises more than 13,000 system restaurants, primarily KFCs and Pizza Huts, operating in over 110 countries outside the United States. The China Division, based in Shanghai, China, comprises approximately 3,600 system restaurants, predominately KFCs.

In each restaurant Concept, consumers can dine in and/or carry out food. In addition, Taco Bell, KFC, LJS and A&W offer a drive-thru option in many stores. Pizza Hut offers a drive-thru option on a much more limited basis. Pizza Hut and KFC offer delivery service. The Company and its franchisees also operate multibrand units, primarily in the United States, where two or more of the Concepts are operated in a single unit. During fiscal 2008, there were 4,958 multibranded units in the worldwide system, of which 4,629 were in the United States. These units comprise 2,751 units offering food products from two of the Concepts, 40 units offering food products from three of the Concepts, and 2,167 units offering food products from Pizza Hut and WingStreet, a flavored chicken wings concept.

KFC

KFC operates in 109 countries and territories throughout the world. In fiscal 2008, KFC had 5,253 units in the United States and 10,327 units outside the United States, including 2,497 units in mainland China. Approximately 18% of the United States units and 28% of non-United States units are operated by the Company. Traditional KFC restaurants in the United States offer fried chicken-on-the-bone products, primarily marketed under the names Original Recipe and Extra Tasty Crispy. Other principal entree items include chicken sandwiches (including the Snacker and the Twister), KFC Famous Bowls, Colonel’s Crispy Strips, Wings, Popcorn Chicken and seasonally, Chunky Chicken Pot Pies. KFC restaurants in the United States also offer a variety of side items, such as biscuits, mashed potatoes and gravy, coleslaw, corn, and potato wedges, as well as desserts. While many of these products are offered outside of the United States, international menus are more focused on chicken sandwiches and Colonel’s Crispy Strips, and include side items that are suited to local preferences and tastes. Restaurant decor throughout the world is characterized by the image of the Colonel.

Pizza Hut

Pizza Hut operates in 97 countries and territories throughout the world. During fiscal 2008, Pizza Hut had 7,564 units in the United States and 5,611 units outside of the United States. Approximately 14% of the United States units and 25% of the non-United States units are operated by the Company. It features a range of pizzas, which may include Pan Pizza, Thin n Crispy, Hand Tossed, Sicilian, Stuffed Crust, Twisted Crust, Sicilian Lasagna Pizza, Cheesy Bites Pizza, The Big New Yorker, The Insider, The Chicago Dish and 4forALL. Each of these pizzas is offered with a variety of different toppings. Pizza Hut also offers a variety of Tuscani Pastas. In some restaurants, Pizza Hut also offers WingStreet chicken wings, breadsticks, salads and sandwiches. Menu items outside of the United States are generally similar to those offered in the United States, though pizza toppings are often suited to local preferences and tastes.

Taco Bell

Taco Bell operates in 17 countries and territories throughout the world. In fiscal 2008, there were 5,588 Taco Bell units in the United States and 245 units outside of the United States. Approximately 24% of the United States units and 1% of the non-United States units are operated by the Company. Taco Bell specializes in Mexican-style food products, including various types of tacos, burritos, gorditas, chalupas, quesadillas, taquitos, salads, nachos and other related items. In addition, entree items include Grilled Stuft Burritos and Border Bowls. Taco Bell units feature a bell logo on their signage.

LJS

LJS operates in seven countries and territories throughout the world. In fiscal 2008, there were 1,022 LJS units in the United States and 38 units outside the United States. All single-brand units inside and outside of the United States are operated by franchisees or licensees. In fiscal 2008, there were 137 company operated multi-brand units that included the LJS concept. LJS features a range of seafood and chicken items, including meals featuring batter-dipped fish, chicken and shrimp, non-fried salmon, shrimp and tilapia, hushpuppies, and portable snack items. LJS units feature a seaside/nautical theme.

A&W

A&W operates in 10 countries and territories throughout the world. In fiscal 2008, there were 363 A&W units in the United States and 264 units outside the United States. All single-brand units inside and outside of the United States are operated by franchisees. In fiscal 2008, there were 89 company operated multi-brand units that included the A&W concept. A&W serves A&W draft Root Beer and a signature A&W Root Beer float, as well as hot dogs hamburgers.