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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
Building BIG Brands in Asia Pacific

Henry Saliba

Director of Development

agenda
Agenda
  • YUM Brands / YRI – who we are
  • Asia Franchise Business Unit (AFBU)
  • Our business philosophy
  • Our franchising model
  • How we engage
we are also the largest retail developer in the world
We are also the largest retail developer in the world

1700+ gross builds a year in 2009!

US

YRI

CHINA

yri s asset base is vast
YRI’s asset base is vast…

Over 13,000 restaurants, of which 83% are franchised

As of Q1 2010

4000 restaurants in asia pacific alone
4000+ restaurants in Asia Pacific alone!

LARGEST

contributor toYRI’s

Operating Profit

afbu covers 14 countries 29 franchisees and all 5 brands

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)

slide17

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

slide21

We are about ACCELERATINGTHE

BUILDING OF BIG BRANDS

slide22

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

slide23

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
slide24

Roles & responsibilities

  • Dallas RSC
    • Globalization of Best Practices
    • Defining Operating Standards
  • Business Units & Franchisees
    • Creation of Best Practices
    • Execution
slide25

The partnership works!

  • Dominant Brands
  • Dominant Market Share
  • World Class Assets
  • World Class Teams
and our partnership has a bold future
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
our franchisees make this possible
Our franchisees make this possible

New Net Openings

924

900

852

785

780

Equity

FZ

27

our growth leadership mindset is key
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
our franchising model
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
franchisee franchisor relationship
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
franchise agreement
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
franchise agreement1
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
franchise agreement2
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
franchise policies manual

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
non compete
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
development agreement
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
our goals
Our Goals

Building of Big Brands

Build & Rebuild

Units

Build World

Class Designs

Build Profitable

Restaurants

Build People

our current franchising needs
Our current franchising needs?

Interested?

Contact Henry Saliba: henry.saliba@yum.com