Yum! Brands Inc. is partnering with third-party delivery company Grubhub Inc. to provide KFC and Taco Bell with online ordering, pickup and delivery at U.S. restaurants, the company said Thursday.
As part of the deal, Louisville, Ky.-based Yum agreed to buy $200 million of Grubhub stock to help expand its U.S. delivery network. Yum will also get a board seat at the Chicago-based company, which serves 1,300 U.S. cities.
Yum said Grubhub will be its only national online delivery partner for KFC and Taco Bell. Its Plano, Texas-based Pizza Hut brand maintains its own delivery network. The Grubhub deal also includes marketing initiatives.
Yum said nearly half of its 45,000 global restaurants already offer online ordering, pickup and delivery.
“We’re pleased to secure this partnership with Grubhub in order to drive incremental, profitable growth for our U.S. franchisees over the long term,” said Greg Creed, Yum CEO, in a statement.
About 1,500 Taco Bell restaurants in the U.S. already deliver, and KFC has been testing delivery, Creed said.
“KFC, Taco Bell and Grubhub will work with franchisees to test and roll out online ordering for pickup and delivery to thousands of participating KFC and Taco Bell restaurants in the U.S. markets Grubhub serves,” the company said.
The initial phase of the deal will launch in the next few months, the company said.
Matt Maloney, Grubhub CEO, said the platform has 14 million active users.
“We are excited to tap into the unmatched consumer awareness and innovative advertising of KFC and Taco Bell, helping accelerate the secular shift from offline ordering to online, driving more orders to all of our restaurants,” he said.
Grubhub will expand its board of directors from nine to 10 members and appoint Pizza Hut U.S. president Artie Starrs to the newly created board seat as an independent director.
The companies are working to integrate point-of-sale systems and other technologies, Yum said.
Yum has restaurants in more than 135 countries and territories.
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