About Yum! Brands

Yum! Brands, Inc. (YUM), together with its subsidiaries, develops, operates, and franchises a worldwide system of both traditional and non-traditional quick service restaurants (QSRs). YUM has restaurants in more than 155 countries and territories primarily operating under the four concepts of KFC, Taco Bell, Pizza Hut and The Habit Burger Grill (the ‘Concepts’). The company’s KFC, Taco Bell and Pizza Hut brands are global leaders of the chicken, Mexican-style food and pizza categories, respectively. The Habit Burger Grill is a fast-casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. As of December 31, 2023, 98% of the company’s Concepts’ units were operated by independent franchisees or licensees under the terms of franchise or license agreements. KFC KFC was founded in Corbin, Kentucky, by Colonel Harland D. Sanders, an early developer of the quick service food business and a pioneer of the restaurant franchise concept. The Colonel perfected his secret blend of 11 herbs and spices for Kentucky Fried Chicken in 1939 and signed up his first franchisee in 1952. KFC restaurants across the world offer fried and non-fried chicken products such as sandwiches, chicken strips, chicken-on-the-bone and other chicken products marketed under a variety of names. Taco Bell The first Taco Bell restaurant was opened in 1962 by Glen Bell in Downey, California, and in 1964, the first Taco Bell franchise was sold. Taco Bell specializes in Mexican-style food products, including various types of tacos, burritos, quesadillas, salads, nachos and other related items. Pizza Hut The first Pizza Hut restaurant was opened in 1958 in Wichita, Kansas, and within a year, the first franchise unit was opened. Pizza Hut specializes in the sale of ready-to-eat pizza products and operates in the delivery, carryout and casual dining segments around the world. Habit Burger Grill The first Habit Burger Grill restaurant opened in 1969 in Santa Barbara, California. The Habit Burger Grill restaurant concept is built around a distinctive and diverse menu that includes chargrilled burgers and sandwiches made-to-order over an open flame and topped with fresh ingredients. Business Strategy The company’s global citizenship and sustainability strategy is reflected in its Good agenda, which includes the company’s priorities for social responsibility, risk management and sustainable stewardship of the company’s people, food and planet. The company’s Growth agenda is based on four key drivers: Unrivaled Culture and Talent: Leverage the company’s culture and people capability to fuel brand performance and franchise success. Unmatched Operating Capability: Recruit and equip the best restaurant operators in the world to deliver great customer experiences. Relevant, Easy and Distinctive Brands: Innovate and elevate iconic restaurant brands people trust and champion. Bold Restaurant Development: Drive market and franchise unit expansion with strong economics and value. Segments As of December 31, 2023, YUM consisted of four operating segments: The KFC Division which includes the company’s worldwide operations of the KFC concept. The Taco Bell Division which includes the company’s worldwide operations of the Taco Bell concept. The Pizza Hut Division which includes the company’s worldwide operations of the Pizza Hut concept. The Habit Burger Grill Division which includes the company’s worldwide operations of the Habit Burger Grill concept. Franchise Agreements The company has franchise relationships that are particularly important to its business, such as the company’s relationship with Yum China (Yum China Holdings, Inc.) and the company’s relationships with certain other large franchisees. The company has approximately 1,500 franchisees with whom the company has franchise contracts. The company utilizes both store-level franchise and master franchise programs to grow the company’s businesses. Of the company’s over 57,000 franchised units as of December 31, 2023, approximately 35% operate under the company’s master franchise programs, including over 13,700 units in mainland China. The remainder of the company’s franchise units operate under store-level franchise agreements. The use by Yum China of certain of the company’s material trademarks and service marks is governed by a master license agreement between Yum Restaurants Consulting (Shanghai) Company Limited, a wholly-owned indirect subsidiary of Yum China, and YUM, through YRI China Franchising LLC, a subsidiary of YUM. Restaurant Operations Through its Concepts, YUM develops, operates and franchises a worldwide system of both traditional and non-traditional Quick Service Restaurants (‘QSR’). Traditional units can feature dine-in, carryout, drive-thru and delivery services. Non-traditional units include express units that have a more limited menu, usually generate lower sales volumes and operate in non-traditional locations like malls, airports, gasoline service stations, train stations, subways, convenience stores, stadiums, amusement parks and colleges, where a full-scale traditional outlet would not be practical or efficient. Most restaurants in each Concept offer consumers the ability to dine in, carryout and/or have the Concepts’ food delivered either by store-level personnel or third-party delivery services such as aggregators. In addition, Taco Bell, KFC and Habit Burger Grill offer a drive-thru option in many stores. Pizza Hut offers a drive-thru option on a much more limited basis. The company and its Concepts own numerous registered trademarks. Many of these marks, including the company’s Kentucky Fried Chicken, KFC, Taco Bell, Pizza Hut and The Habit marks, have significant value and material importance to the company’s business. Supply and Distribution The company and franchisees of the Concepts are substantial purchasers of a number of food and paper products, equipment and other restaurant supplies. In the U.S., the company, along with the representatives of the company’s KFC, Taco Bell and Pizza Hut franchisee groups, are members of Restaurant Supply Chain Solutions, LLC (‘RSCS’), a third party which is responsible for purchasing certain restaurant products and equipment. Additionally, The Habit Burger Grill entered into a purchasing agreement with RSCS effective July 31, 2020. Most food products, paper and packaging supplies, and equipment used in restaurant operations are distributed to individual restaurant units by third-party distribution companies. In the U.S., McLane Foodservice, Inc. is the exclusive distributor for the majority of items used in Company-owned restaurants and for a substantial number of franchisee restaurants. Outside the U.S., the company and its Concepts’ franchisees primarily use decentralized sourcing and distribution systems involving many different global, regional and local suppliers and distributors. The company’s international franchisees generally select and manage their own third-party suppliers and distributors, subject to the company’s internal standards. All suppliers and distributors are expected to provide products and/or services that comply with all applicable laws, rules and regulations in the state and/or country in which they operate, as well as comply with the company’s internal standards. History YUM! Brands, Inc. was founded in 1997. The company was incorporated under the laws of the state of North Carolina in 1997.