Yum! Brands Inc. said Tuesday it planned to sell Long John Silver’s and A&W All-American Food in order to focus on its three larger quick-service brands.
Yum said selling the two brands, which collectively account for 1,630 franchised units, would allow it to put more attention on improving its domestic system under the three remaining brands — KFC, Pizza Hut and Taco Bell — as well as continuing to expand abroad.
Chief executive David Novak said Long John Silver’s and A&W no longer factored into the company’s long-term plans, including the expansion of its China and Yum Restaurants International divisions, which account for about 65 percent of the company’s profits.
“We do not believe Long John Silver’s and A&W All-American Food restaurants fit into our long-term growth strategy,” Novak said. “Accordingly, we have decided to put these two great brands up for sale, and we will complete the sale only once the right buyer or buyers have been identified and we can ensure a seamless transition.”
Yum officials said they did not expect the eventual sale to have a significant impact on ongoing earnings or cash flow.
Yum has identified international growth as a key source of future profits — as much as 75 percent of Yum’s total profits by 2015 — and said it plans to open 900 restaurants in Yum Restaurants International and 475 units in China this year. Domestic strategic goals in the near term include refranchising the KFC system and continuing a test of breakfast at Taco Bell. Officials have said Taco Bell has the potential to grow from more than 6,000 locations now to an 8,000-unit chain in the United States.
Louisville, Ky.-based Yum operates or franchises 37,000 restaurants worldwide.
Contact Mark Brandau at [email protected].
