By the end of 2024, Yum China announced an accelerated franchising plan for KFC and Pizza Hut, marking a new growth phase in its expansion model. Chief Development Officer He Min stated that this decision was not impulsive but a “natural outcome” after long-term preparation. In the coming years, 40%-50% of KFC’s net new stores will come from franchising, compared to just 15% in 2023. Through franchising, Yum China aims to rapidly capture market share, penetrating strategic locations, remote areas, and lower-tier cities.

To support franchisees’ rapid growth, Yum China introduced four new initiatives: simplifying franchise fee structures, providing AI-powered site selection tools, opening more channels and cities, and optimizing franchise team services. The AI site selection tool leverages big data and AI models to offer precise location assessments, enhancing site selection efficiency. Yum China has made digitalization a core infrastructure, developing efficient digital tools like automated replenishment systems to boost franchisee performance.

On the supply chain front, Yum China’s robust network, with 33 logistics centers covering over 2,200 towns, supports store openings in remote and lower-tier cities. The depth and breadth of its supply chain ensure food safety and stable supply. Additionally, Yum China maintains a rigorous franchisee selection process, focusing on channel franchisees and those in remote areas and small towns, prioritizing expansion willingness, operational capabilities, and shared values to ensure high-quality franchisees.

Despite challenges in the restaurant industry, Yum China sees significant growth potential. Currently, 800 cities lack a KFC, and 1,400 lack a Pizza Hut. Yum China continues to test and upgrade new store formats, such as KFC’s small-town mini model, targeting lower-tier markets with optimized investment costs and operational efficiency. He Min emphasized that Yum China will support franchisees with frontline insights, addressing operational pain points to build long-term, win-win partnerships.

Yum China’s accelerated franchising plan not only creates more opportunities for franchisees but also lays a solid foundation for the company’s sustained growth. With digital empowerment and supply chain advantages, Yum China’s competitiveness in the restaurant industry will further strengthen.

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