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Yum! trades $185M investment for control of KFC’s marketing

Yum! Brands has forged an agreement with franchisees of its KFC brand to assume control of the chain’s advertising in exchange for a $185-million investment in back-of-the-house equipment, additional marketing and incentives to speed up store renovations.

“This agreement gives us clear marketing control for the first time as well as an accelerated path to improve assets and customer experience,” commented CEO Greg Creed.

The agreement was inked on Feb. 27 but was not disclosed until Wednesday during a conference call with financial analysts. Yum! did not divulge details, but noted that its sales expectations from the deal are high.

“We are expecting to see sales lift from the investments we are making for franchises in new equipment which puts them in a position not only to offer [a] more contemporary menu but to do so in a fashion that provides a better customer experience with better reliability,” said CFO Pat Grismer. “There will be a sales benefit associated with that and we expect that will build over time.”
 

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