Yum Invests $185 Million in Modernizing KFC FranchisesThe parent company is taking over KFC's domestic marketing as franchisees remodel back of house.
ByKate Taylor•
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KFC is ready to get modern.
Today, in its first-quarter earnings call, parent company Yum Brands announced it plans to invest $185 million towards "contemporizing" KFC over the next three years. The investment will fund new back of house equipment, incentives to accelerate remodeling and advertising.
As part of the deal, KFC franchisees will grant Yum Brands marketing control, a move that Yum Brands CFO Pat Grismer said "will empower our KFC U.S. leadership team to sustain a turnaround of this business." KFC franchisees reached the agreement with Yum on February 27.
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Yum Brands plans to invest $100 million in KFC franchisees this year, with the remaining costs split evenly between 2016 and 2017.
On Tuesday, Yum Brands reported KFC same-store sales increased 5 percent in the first quarter of 2015. The chicken chain is facing some stiff competition, however, as rival Chick-fil-A shows offits fast-casual-influenced tactics. With the cash infusion, Yum has the potential offer franchisees the financial boost to similarly class up operations at the chicken chain.
Yum Brands has also recentlyexpanded Super Chix, a fledgling restaurant concept that could give it a leg up in the fast-casual chicken market.
Related:Watch Out Chick-fil-A: KFC's Chicken Sandwich Sister Chain Is Opening a Second Location
