Yum! Brands ropes in new CEOs for Taco Bell & Pizza Hut

American fast-food major Yum! Brands filed a lawsuit against delivery player Grubhub on Thursday in New York County’s Supreme Court.

Owners of fast food chains, Taco Bell, KFC and Pizza Hut, Yum! Brands claims that the food delivery player has violated its contract.

According to Yum! Brands it took $200 million, or 2 per cent stake in the company in 2018 as it looked to expand delivery across KFC and Tacobell, Part of the deal ensured favorable pricing for thousands of restaurants, mostly franchisees, reported QSR Magazine.

This happened a day after Grubhub announced a $7.3 billion merger with Just Eat Takeaway.

Yum! alleged in the suit that Grubhub CEO Matt Maloney improperly terminated the contract June 2. According to the lawsuit, he sent Yum! a letter saying the fast-food company’s involvement with Uber Eats and Postmates violated terms of the deal. Yum! denied the claim, reported QSR Magazine.

Per the suit, Maloney said in an email the agreement was of no “further force and effect” and would “no longer apply.” Grubhub then told Yum! franchisees of a substantial increase in delivery fees. Yum! said Grubhub said “all fees will be paid by the diner.”

Yum!’s concern with that, however, given how it’s operated under favorable terms in recent years, is that the uptick would cause reputational damage as delivery charges rose to nearly 40 percent. It would dampen sales as well.

Essentially, Grubhub admitted Yum! customers would need to pay roughly 40 percent more for the same delivery orders.

Yum! said in the suit it asked Grubhub to revoke its termination of contract and enter into negotiations. Grubhub instead reached out directly to franchisees to let them know of the new pricing structure, the suit said.

Yum! also claimed Grubhub blacked out restaurants open for business during COVID-19. In separate occasions, the suit said, Grubhub asked for payment for services it was required to provide for no extra charge under the original contract.

Yum! added when Grubhub launched its subscription service in February 2020, it breached the contract by not letting Taco Bell or KFC units participate unless they paid an additional fee.

The company accused Grubhub of trying “to rid itself of a deal it no longer wanted and to line its pockets.”

The contract also allegedly included a $50 million termination fee for Yum! if Grubhub was taken over by a third-party that competed with its restaurants.

Yum! Brands, the owner of KFC, Taco Bell and Pizza Hut, has announced former Walmart Executive Clay Johnson as its new Chief Digital and Technology Officer. The company has also promoted Gavin Felder to its Chief Strategy Officer.

The newly created positions will be working with the group’s chains to elevate the customer experience and accelerate global growth.

Clay Johnson was enterprise Chief Information Officer for retail giant Walmart.

Post joining, Johnson will oversee Yum! Brands’ global technology strategy, working with its three brands to improve mobile, online, delivery and restaurant operations.

Yum! said, “He would lead a coordinated, cross-brand effort to accelerate the company’s digital commerce strategy, use of data and advanced analytics and emerging technologies.”

Meanwhile, Gavin Felder was promoted from KFC, where he had been the division’s Chief Financial Officer for the past five years. Felder will be responsible to develop Yum’s long-term corporate strategies, working with the chains to find new sources of growth.

David Gibbs, President of Yum! Brands, stated, “We believe Clay Johnson and Gavin Felder are the ideal executives to accelerate Yum Brands’ growth through technology-centric strategies that advance the customer experience and ultimately deliver better economics and more value for our franchisees and shareholders.”

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Yum! Brands has named David Gibbs, who had been recently working as the COO of the company, as its Chief Executive Officer (CEO). Gibbs will succeed Greg Creed, who will be retiring at the end of 2019. 

Gibbs, who has been with Yum! Brands since 1989, has held several senior roles including Chief Financial Officer (CFO) for three years and COO from early 2019. 

Creed has been with the company for 25 years. He will remain as CEO through the end of 2019. Creed will be serving as a part-time adviser next year and also remain on the company's board.

The Louisville, Kentucky-based Yum! Brands has over 48,000 Pizza Hut, Taco Bell, and KFC restaurants spread across the globe. The company is facing a competitive market at this critical juncture in the fast-food chain market.

In order to tap into the food delivery business, Yum! even acquired a stake in the food-ordering and delivery services company GrubHub in 2018. 

Yum! Brands has reported system sales growth for its KFC and Pizza Hut brands in India by 22% and 9%, respectively, for the second quarter ended June 30, 2019. This is the eleventh consecutive quarter of positive system sales growth for both brands in the country.

The fast food company measures growth through system sales, that includes the results of all restaurants regardless of ownership, including company-owned and franchise restaurants.

Samir Menon, Managing Director, KFC India, said, “The quarter ending June (Q2 2019) marked the eleventh consecutive quarter of positive system sales growth, with a 22% system sales growth, for India and area countries. The results signify the brand’s continued positive momentum for the last three years.”

Besides Pizza Hut and KFC, Yum! also runs the Taco Bell brand of fast food globally.

Earlier in 2019, Taco Bell has announced plans to launch 600 restaurants over the next 10 years, to make India its largest market outside the US. The plan comes after the company signed New-Delhi based Burman Hospitality Pvt Ltd as its master franchise partner for the brand in India.

Ankush Tuli, Managing Director, Taco Bell APAC, stated, “Taco Bell is gaining significant momentum in India, with a strong quarter of double-digit same-store sales growth. This happened on the back of value offerings such as the Big Bell Box and introduction of global innovations like the Quesalupa.”

Yum! Brands Inc, the fast food company, has said that system sales for its KFC and Pizza Hut brands in India grew 26% and 11% respectively for the quarter ended March 31. Both brands have posted positive system sales growth for ten consecutive quarters.

Samir Menon, Managing Director, KFC India, said, "The quarter ending March 2019 marks the tenth consecutive quarter of positive system sales growth, with a 26% system sales growth for (KFC) India and area countries. This continued momentum attests to our three-pronged strategy on building our core business through exciting innovation like KFC Double Down, strengthening affordability across the menu categories and expanding access through new store openings and delivery."

"The burger chain’s association with food aggregators over the last few months has also helped the restaurant chain reach more consumers," he added.

Yum! is operating via two franchise partners, namely RJ Corp-owned Devyani International and Sapphire Foods, in India. While Sapphire is operating more than 250 outlets of Pizza Hut and KFC in India and Sri Lanka, Devyani International manages a bulk of KFC, along with Pizza Hut among other restaurants.

The owner of fast food chains KFC, Pizza Hut and Taco Bell, Yum! Brands Inc has posted a strong double-digit sales growth in revenues in India in the fourth quarter ending December and in the full year of 2018.

KFC India posted a 20% system sales growth in 2018 while recording a 17% system sales growth in the fourth quarter ended December 31, 2018.

Samir Menon, Managing Director, KFC India, said, "The quarter ending December, marked the ninth consecutive quarter of positive system sales growth, with a 17 per cent system sales growth for India and area countries."

"The year gone by has been significant for KFC India with major developments on the brand and business front. Making KFC more accessible to consumers was a prime objective through the year- we kept our focus on everyday value, delivery and expanding our physical footprint across the country with new restaurants. We are confident of riding this positive momentum into 2019 and will continue to strengthen the brand through operational excellence and distinctive communication," he added.

Pizza Hut reported a system sales growth of 14% in the fourth quarter. The pizza chain has been consistently posting double-digit growth.

Street food restaurant chain Yumlok is in talks with investors to raise USD 1 million by the end of this fiscal to support its expansion plans.

The company at present operates four outlets and is planning to open 50 outlets by 2020 across the country.

"We are in talks with investors to raise USD 1 million by March. We plan to use this fund to open new outlets, marketing and brand building," shared Avinash Gupta, Founder and CEO, Yumlok.

Yumlok got an undisclosed amount of angel funding from Naman Sarawagi (who also invested in Cashfree and DailyNinja) and Ashish Agarwal (founder of Digital Harbor and member of Mumbai Angels) in 2016.

Yumlok plans to open outlets in metro cities, tier I and II cities such as Ahmedabad, Kanpur, Lucknow, Bhopal and Indore. It serves North Indian meal combos, Delhi style chaats and some Indo-Western fusion dishes.

Bengaluru based street food restaurant Yumlok plans to invest Rs 50 crore in setting up 50 stores by 2020.

Demand for home-like food along with paucity of time to cook at home among other are leading this two year old street food restaurant to think of expansion.

Avinash Gupta founder of the restaurant said “Our youth contributes to 28% of our population of 1.3 billion. Youth population of India has liberal mindset. They encourage experimentation with greater consumption. Eating out is often seen as habit among youngsters rather than occasion driven activity. Digital India has helped us in market penetration and prompt home delivery. Keeping all these in mind, time is just right to expand. Our processes are at place. So the key here is speed with right product, process, place and price. Value for money and authentic taste will make your position stable in over crowded market of QSR industries.”

A few popular dishes of the restaurant are Delhi style chaats, Mumbaiya pav bhaji, Bihari sattu paratha along with fusion of Indian and western cuisine, like one of the categories is US Aunty Wali Chaats, a blend of western recipes with Indian spices.

As per Gupta millennial and Gen Z are driving the growth of QSR and Online 2 Stores segments as they don’t have much time to spend on food due to their multi-tasking and digital media engagement.

Hitesh Arora has quit as CIO of Yum! Brands India, the global QSR chain to join CRMNEXT, as Director Strategy & Customer Advocacy.

Arora joined Yum Restaurants in January 2014 as the CIO for Indian Subcontinent. During his period with the brand Arora was instrumental in building a sturdy analytics platform and enabling the digital channel of Yum Brands.

He also introduced future back technology strategy at Yum Brands. With over 25 years' of experience in the IT industry, he has held leadership positions at blue chip organizations like Nucleus Software, Polaris Financial Technologies, NIIT Technologies, Bank of America, Max Life Insurance and Yum Brands. 

He is widely recognised as a Global Technology, Operations and Sales Leader in Financial, Manufacturing, Retail and Technology Services domain.

CRMNEXT is the foremost global cloud CRM solution provider. It has been notified as the 'Top 20 Product Companies in Asia'.

"I will be responsible for helping CRMNEXT understand the customer challenges and ensuring the product roadmap alignment. My key responsibility would be ensuring that product innovation is in line with the customer needs. I will also create investment strategy to enable readiness for the future of CRM. I responsibilities will cover the entire spectrum from pre sales to realization of outcomes for our customers,” shared Arora.

At CRM Next, Arora would be responsible for Strategy and Customer Advocacy, which ideally would cover business strategy, which would lead to identifying the business objectives and deciding where to invest to best achieve those objectives. His new role is to work closely with Nishant Singh, Founder, Chairman & CEO, CRMNEXT and the board of the company.

Fair trade regulator CCI has approved the proposed acquisition of some franchise operations of Yum! India, which owns Pizza Hut, KFC and Taco Bell restaurants by a consortium of investors led by Samara Capital.

Under the deal, a total of 117 KFC and 91 Pizza Hut outlets would be acquired by the clutch of investors including Samara Capital, QSR Management Trust, Goldman Sachs Investments Holdings Asia, IDI Emerging Markets Partners CX Partners, Sapphire Foods India Pvt Ltd and Sapphire Foods Mauritius.

In an order, the Competition Commission of India (CCI) said it "is of the opinion that the proposed combination is not likely to have an appreciable adverse effect on competition in India in any of the relevant market."

As part of the deal, the investors would acquire 87 KFC outlets from Yum! India, while 81 Pizza Hut outlets would be purchased from the Dubai-based Dodsal group, among others.

Overall, Pizza Hut has around 380 outlets in the country, while KFC has 352.

KFC, one of the largest burger chain in the world has started selling pink burgers in China in order to boost the sale.

The burger chain is continously facing a hit in sales from the last three years in the country.

The sandwich is called the "rose cheese chicken leg roasted burger" and it features pink buns, roasted chicken, cheese, mayonnaise, tomato and lettuce.

Also, the chain is using rose petals around the burgers to promote it online nad offline.

The Rose cheese chicken burger debuted alongside a new black burger which is called the "black diamond bacon spicy chicken leg burger."

KFC is launching its colored burgers subsequent Burger King's release of red and black burgers in Japan.

In July, Burger King launched the Red Samurai Chicken burgers with bright red buns, red cheese and red hot sauce made from miso and hot peppers. Recently, the chain also released a new all-black sandwich in Japan, following its first black burger last September.

So, KFC has been trying to revitalize its sales in China, which has fall by 10 percent in the recent quarter. The chain has been plagued by food safety scandals and stiffer competition from Western brands like Starbucks and McDonald's, which are expanding in China.

Last year, one of the KFC's suppliers was shut down after a news report showed that the factory workers were using expired meat. 

Yum! Brands, which entered India in early 90s is planning to split operations between its two franchisees, Devyani International and PE Fund Samara Capital, reported ET.

Yum currently operates more than 800 KFC, Pizza Hut and Taco Bell stores across India through about half a dozen franchise partners.

The exiting franchisees include Dubai-based Dodsal group, KFC Holdings Malaysia, Punjab-based ANPPL and a smaller one in Kerala.

KFC Holdings Malaysia runs stores in the western region, including Maharashtra. Samara is also learnt to be buying out entrepreneur CK Jaipuria's franchisee in Sri Lanka.

"Yum wants to operate its KFC and Pizza Hut franchisees through Devyani in the North and East and Samara in the South and West," said an executive with knowledge of the development.

Devyani, Yum's largest partner, runs more than 60 percent of the stores, mainly in the North and East.

According to two executives, Dodsal has close to 80 Pizza Hut stores in the north that will go to Samara. More than 30 Yum stores owned by KFC Holdings Malaysia in the western region are being sold to Samara for an estimated Rs 50 crore. ANPPL runs about 25 stores in Punjab.

"Consolidation would help the firm grow faster. A lesser number of franchisees are easier to manage and a few larger players with greater investment capabilities would help turn step up growth,’ said said food retail consultant Samir Kukreja.

Yum will also be divesting some of its own stores to Samara. "Yum is banking on only two partners to step up growth and itself operate on a lower cost model focusing mainly on branding and customer relationships," said one of the executives cited earlier.

Taco Bell will also increase operations in the north through Gaurav Burman of the Dabur family.

After Domino’s failed food quality tests in the Western part of the Uttar Pradesh, KFC, the global chain, has failed quality testing in the state.

The issue brought to the notice by Allahabad district authorities where Food Safety and Drug Administration (FSDA) of UP has confirmed the same.

The FSDA report had collected samples of edible oil from a KFC outlet, the franchise of which is owned by Yum Restaurant Private Limited.

It was found, after the test that "miracle powder" was being used to keep the oil fresh. Even palmolein oil was also found rancidity positive.

"Once the oil becomes rancidity positive, it becomes acidic when it comes into contact with oxygen. This directly affects the digestive system,” shared Ram Araj Maurya, additional commissioner, FSDA.

He also added that the department has served two notices to the KFC outlet.

Last month, FDA had cancelled the license of the Gajraula outlet of Domino’s in the Amroha district after its tomato sauce snack packing was found unsafe for consumption after tests in the Kolkota laboratory.

Taco Bell, the world’s largest Mexican-style quick service restaurant chain announced its expansion into New Delhi with its launch at Ambience Mall, Vasant Kunj.

Taco Bell announced the Delhi launch with Burman Hospitality Private Limited (BHPL), its first franchisee in India incorporated by The Burman Family, the promoters of Dabur.

Taco Bell, along with Burman Hospitality, plans to take the store count to 25 restaurants in the next 18-24 months, said the statement. 

Speaking about the launch Unnat Varma, General Manager – Taco Bell & Pizza Hut said, “Delhi fans have been asking for Taco Bell in their city and we’re are excited to offer our signature Mexican-inspired food and break-through value to our consumers here who have a youthful spirit.”

In addition to the grand opening in New Delhi, Taco Bell has 6 restaurants in Bangalore and Mumbai.

With a strong proof of concept in Bangalore and Mumbai, the company is now targeting at increasing their footprint across India and are delighted to work with Burman Hospitality as part of their expansion strategy into northern states including New Delhi, Punjab, Chandigarh and Uttarakhand.

“We are delighted and honoured to work with Yum to grow Taco Bell in India. The Burman Family over the last 20 years has partnered with many of the leading Fortune 500 companies globally to bring their businesses to India,” shared Gaurav Burman, Director, Burman Hospitality Private Limited.

The new restaurant’s contemporary design is inspired by its Mexican-style cuisine and the brand’s California-based heritage.

It’s has an urban fresh look which brings to life the brand’s belief in freshness and made-to-order food which can be seen from the open kitchen.

“We believe Taco Bell with its differentiated and innovative product offering will win the hearts and stomachs of the Indian consumer. It is our sincere aim to offer the highest quality, best tasting, value driven offering to the Indian consumer. We look forward to opening Taco Bell restaurants in India and making it the most successful QSR brand in the country,” added Burman.

The 75-seater Delhi restaurant will offer international classics like Crunchy Taco Supreme, Crunchwrap and Burritos as well as Kathitto developed especially for India to suit the local palate.

RI Bureau

Taco Bell, the American fast food chain is opening its first restaurant in Delhi on June 8th at Ambience Mall, Vasant Kunj, Delhi.

Operated by Yum! Brands, Taco Bell presently has six outlets in Bengaluru and Mumbai.

Yum! Brands, which also runs brands like KFC and Pizza Hut, has partnered with Dabur family to expand Taco Bell’s business in north India,

Gaurav Burman, together with his brother Mohit Burman and his father VC Burman has took the franchisee of Taco Bell to expand its services in the region.

India's first Taco Bell outlet was opened at the Mantri Square mall, Bengaluru in 2010 followed by more outlets in Bengaluru and Mumbai.

Taco Bell, America's largest Mexican fast food restaurant chain, has over 6,000 restaurants across 16 countries globally. It serves food including tacos

YUM! Brands, one of the world’s largest restaurant companies and parent of KFC, Pizza Hut and Taco Bell, has been named one of the Top 20 learning and development organizations by Chief Learning Officer magazine’s 2015 LearningElite program.

The Company was recognized as a Gold LearningElite organization for 2015 for its unique and comprehensive programs offered through its worldwide learning and development platform, Yum! University.

Yum! Brands is the only quick-service restaurant company on the 2015 LearningElite list.

“Yum! Brands is honored to be recognized as a top company for learning and development. Our global learning culture is focused on building the capability of our 1.5 million associates around the world. We’re passionate about offering innovative tools, programs and learning platforms in order to train and grow the next generation of leaders around the globe,” said, Mark Lagestee, Vice President, Global Talent and Organization Development, Yum! Brands.

In addition to LearningElite, Yum! Brands is recognized as one of Forbes’ America’s Best Employers in 2015 and as one of the 2014 Aon Hewitt Top Companies for Leaders in North America for its leadership development programs and practices.