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Building BIG Brands in Asia Pacific Henry Saliba Director of Development

Building BIG Brands in Asia Pacific Henry Saliba Director of Development. China. Agenda. YUM Brands / YRI – who we are Asia Franchise Business Unit (AFBU) Our business philosophy Our franchising model How we engage. We are the largest restaurant company in the world!.

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Building BIG Brands in Asia Pacific Henry Saliba Director of Development

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  1. Building BIG Brands in Asia Pacific Henry Saliba Director of Development
  2. China
  3. Agenda YUM Brands / YRI – who we are Asia Franchise Business Unit (AFBU) Our business philosophy Our franchising model How we engage
  4. We are the largest restaurant company in the world! 34,880 restaurants as of Dec 2009
  5. We are also the largest retail developer in the world 1700+ gross builds a year in 2009! US YRI CHINA
  6. YRI’s asset base is vast… Over 13,000 restaurants, of which 83% are franchised As of Q1 2010
  7. 4000+ restaurants in Asia Pacific alone! LARGEST contributor toYRI’s Operating Profit
  8. Countries : 11 Franchisees : 15 AFBU covers 14 countries ; 29 franchisees and all 5 brands Pacific South East Asia/HK/Taiwan/Korea Sales : $1.5+ billion Korea Sales : $150MM+ Stores : 2500+ Stores : 150+ Countries : 2 Hong Kong Taiwan Franchisees : 13 Japan Sales : $1.5+ billion Stores : 1500+ Countries : 1 Franchisee : 1 (Sub-Franchisees : 108)
  9. Strong growth since spin-off – 1998 to 2009
  10. A&W LJS Taco Bell PH Company Pizza Hut PH Franchise KFC Japan Franchise KFC Company KFC KFC is the “800 lb gorilla”! Japan Asia Franchise (ex-Japan) % of Sales % of Sales
  11. Our business philosophy
  12. Our business philosophy
  13. Our business philosophy
  14. We are about ACCELERATINGTHE BUILDING OF BIG BRANDS
  15. How our business is organized Support Functions Core Functions Restaurant Excellence Brand Development Product Excellence Franchise Excellence Asset Development Organization Excellence Providing Maniacal Customer Service Building Brand Equity Developing Great Products Building Great Restaurants Finance Excellence
  16. Our franchising model GLOBAL FRANCHISE PARTNERSHIP (GFP) WORLD-CLASS FRANCHISOR WORLD-CLASS FRANCHISEES Consumer proposition Business system Commercial terms Culture Alignment System discipline & process Ready for growth Constructive engagement
  17. Roles & responsibilities Dallas RSC Globalization of Best Practices Defining Operating Standards Business Units & Franchisees Creation of Best Practices Execution
  18. The partnership works! Dominant Brands Dominant Market Share World Class Assets World Class Teams
  19. 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
  20. Our franchisees make this possible New Net Openings 924 900 852 785 780 Equity FZ 27
  21. Our GROWTH& LEADERSHIP mindset is key Scale advantages Supply chain Media efficiency Market penetration drives Convenience Awareness Market Share Competitive Advantage Raises barriers to entry Builds credibility with developers/landlords Assets that separate us from the competition
  22. Our Franchising Model Franchisee gets: License to use our Trademarks for a defined term A business system Franchisor gets: Fees Growth of System, goodwill Dynamic relationship
  23. Franchisee/Franchisor Relationship 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
  24. Franchise Agreement Key Terms Right to Use the System, System Property, and Trademarks Confidentiality protection Protection of System Property & Goodwill of System (non-compete) Renewal Criteria General Principles Site-Specific License: no territorial exclusivity or radius protection No Sub-Franchising
  25. Franchise Agreement Trademarks and System Property The Franchise Agreement includes comprehensive provisions aimed at protecting our Trademarks and intellectual property rights Confidentiality The franchisee’s obligation of confidentiality extends from the terms of the Franchise Agreement and Manuals to all other information concerning the System or YRI’s business and affairs
  26. Franchise Agreement 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
  27. Manual Franchise Policies Manual 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
  28. Non-Compete 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
  29. Development Agreement 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
  30. WHY is Development so important?
  31. Our Goals Building of Big Brands Build & Rebuild Units Build World Class Designs Build Profitable Restaurants Build People
  32. How we engage - Top 6 Franchisees ranked by System Sales
  33. AFBU Partner Engagement Model
  34. Our current franchising needs? Interested? Contact Henry Saliba: henry.saliba@yum.com
  35. More than a restaurant company…… …….a global leader in Franchising
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