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Building BIG Brands in Asia Pacific Henry Saliba Director of Development.

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Presentation on theme: "Building BIG Brands in Asia Pacific Henry Saliba Director of Development."— Presentation transcript:

1 Building BIG Brands in Asia Pacific Henry Saliba Director of Development







8 China

9 Agenda YUM Brands / YRI – who we are Asia Franchise Business Unit (AFBU) Our business philosophy Our franchising model How we engage

10 Page 10

11 34,880 restaurants as of Dec 2009 We are the largest restaurant company in the world!

12 1700+ gross builds a year in 2009! We are also the largest retail developer in the world YRI CHINA US

13 Over 13,000 restaurants, of which 83% are franchised As of Q YRIs asset base is vast…

14 4000+ restaurants in Asia Pacific alone! LARGEST contributor to YRIs Operating Profit

15 Countries:11 Franchisees:15 AFBU covers 14 countries ; 29 franchisees and all 5 brands Countries:2 Franchisees:13 Countries:1 Franchisee :1 (Sub-Franchisees:108) Sales:$1.5+ billion South East Asia/HK/Taiwan/Korea Japan Pacific Hong Kong Taiwan Korea Stores:2500+ Sales:$1.5+ billion Stores:1500+ Sales:$150MM+ Stores:150+

16 Page 16 AFBU UnitsAdded System Sales ($MM)Double Digit CAGR Operating Profit ($MM)4 x Strong growth since spin-off – 1998 to 2009

17 Asia Franchise (ex-Japan) Japan KFC is the 800 lb gorilla! % of Sales KFC Pizza Hut Taco Bell A&W LJS % of Sales KFC Company KFC Japan Franchise PH Company PH Franchise

18 Page 18 Our business philosophy

19 Page 19 Our business philosophy

20 Page 20 Our business philosophy


22 How our business is organized Brand Development Brand Development Product Excellence Product Excellence Restaurant Excellence Restaurant Excellence Franchise Excellence Organization Excellence Finance Excellence Finance Excellence Core Functions SupportFunctions Building Brand Equity Developing Great Products Providing Maniacal Customer Service Asset Development Asset Development Building Great Restaurants

23 Our franchising model Consumer proposition Business system Commercial terms Culture Alignment System discipline & process Ready for growth Constructive engagement WORLD-CLASS FRANCHISOR WORLD-CLASS FRANCHISOR WORLD-CLASS FRANCHISEES WORLD-CLASS FRANCHISEES GLOBAL FRANCHISE PARTNERSHIP (GFP)

24 Roles & responsibilities Dallas RSC –Globalization of Best Practices –Defining Operating Standards Business Units & Franchisees –Creation of Best Practices –Execution

25 The partnership works! Dominant Brands Dominant Market Share World Class Assets World Class Teams

26 And our partnership has a bold future….. YUM = 1,700 openings per year - 4 restaurant openings per day! Asia at almost an opening every day!! YUM = 2,500 remodels per year - 7 remodels per day! Asia at 2 remodels per day!! Best looking, branded restaurants in the world More powerful brands

27 Our franchisees make this possible New Net Openings FZ Equity

28 Our GROWTH & LEADERSHIP mindset is key Scale advantages –Supply chain –Media efficiency Competitive Advantage –Raises barriers to entry –Builds credibility with developers/landlords –Assets that separate us from the competition Market penetration drives –Convenience –Awareness –Market Share

29 Franchisee gets: –License to use our Trademarks for a defined term –A business system Franchisor gets: –Fees –Growth of System, goodwill Dynamic relationship Our Franchising Model

30 There is no agency or partnership YRI and Franchisee are independent parties Both parties should be sensitive to information on which the other party may seek to rely Franchisee/Franchisor Relationship

31 Key Terms –Right to Use the System, System Property, and Trademarks –Confidentiality protection –Protection of System Property & Goodwill of System (non-compete) –Renewal Criteria Franchise Agreement General Principles –Site-Specific License: no territorial exclusivity or radius protection –No Sub-Franchising

32 Trademarks and System Property –The Franchise Agreement includes comprehensive provisions aimed at protecting our Trademarks and intellectual property rights Confidentiality –The franchisees obligation of confidentiality extends from the terms of the Franchise Agreement and Manuals to all other information concerning the System or YRIs business and affairs Franchise Agreement

33 Principal Operator –The franchisee is required to appoint a Principal Operator to be primarily responsible for the management of the business and for dealing with YRI Guarantee –The Franchise Agreement requires a guarantee to be obtained from appropriate parties Franchise Agreement

34 Contains operational details May be amended by YRI any time by notice to franchisees in response to operational changes Formalizes franchisee notification/receipt systems for annual updates Is incorporated into and forms part of the Franchise Agreement Manual Franchise Policies Manual

35 During the Term, YRI must approve any franchisee involvement in any competitive food concept or business anywhere in the world Approval may be withheld for concepts/ businesses in which chicken, pizza/pasta, Mexican, or beef/chicken burger products represent a certain % of the product mix Non-Compete

36 Page 36 General Principles –Applies where franchisee is granted the right to develop stores in a specified Development Area –Franchisees are not given territorial exclusivity. A first right of refusal is a form of territorial protection –Development rights subject to compliance with global Expansion Criteria Development Agreement

37 WHY is Development so important?

38 Our Goals Build & Rebuild Units Units Build World Class Designs Build World Class Designs Build Profitable Restaurants Restaurants Build People Building of Big Brands

39 How we engage - Top 6 Franchisees ranked by System Sales CountryBrandFranchiseeOwnership JapanKFC/ PH KFC JapanPublic Listed (majority : Mitsubishi) Malaysia/ Singapore/ Cambodia KFC/ PH QSR Brands/ KFC Holdings Public Listed (majority : Kulim) IndonesiaKFCPT Fastfood Indonesia Public Listed (family controlled) HK/ Taiwan/ Vietnam PHJardinesPublic Listed (family controlled) PhilippinesKFCHigh-Flyer FoodPrivate Hong KongKFCBirdland (HK)Private Equity (Navis)

40 Page 40 AFBU Partner Engagement Model TYPEPROCESS / METHODSDETAILS STRATEGIC 1.HWWT 2 Action Planning Meetings 2.Partners Council 3.Franchise Convention One APM with each partner per year. Strategic / troubled markets have more Partners council held once a year Franchise Convention once every other year BUILDING KNOWHOW 1.Yum Colleges 2.Conferences & Workshops 3.Best practice visits 4.Champs Challenge / Champions Club In 2010: 2 Yum colleges held 1 workshop held 4 conferences held 7 Best practice visits arranged 2 events held DRIVING RESULTS (ONGOING BUSINESS SUPPORT) 1.Organization structured functionally & by brand to provide markets ongoing support Marketing, Operations – by brand Development, Finance, SCM, QA, R&D, HR - Shared

41 Interested? Contact Henry Saliba: Our current franchising needs?

42 More than a restaurant company…… …….a global leader in Franchising

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