Another key piece is the stabilization of Pizza Hut, a chain that closed a net of 1,063 restaurants in 2020. This year, the brand has opened a net of 368 stores through three quarters. The brand has spent the past few years pivoting from sit-down eateries to a predominantly delivery/carryout model.
“Pizza Hut U.S. is obviously a bright spot for us right now and will be for the long-term as all the work that we've been doing over the last few years investing in digital and capabilities and working with our franchise partners has really started to pay off,” Gibbs said. “ … But it's not immune to the same staffing challenges that everybody is facing."
“I'm sure those sales were held back to some degree by the challenges of getting drivers,” he continued. “We actually saw our carryout businesses now starting to grow faster. When we don't have the ability to get drivers, we're still able to pivot to carryout. We know that there is a lot of demand for what we're offering at Pizza Hut and with a bright future in the U.S."
The Habit Burger, which Yum! acquired for $375 million in 2020, is by far the company’s smallest brand, but momentum is building. Gibbs said demand from potential franchisees—both inside and outside the system—is growing and the company is starting to close a few deals both domestically and internationally.
The CEO noted the restaurant had the biggest hill to climb during the pandemic with dine-in mixing 60 percent, and people have noticed the successful pivot to off-premises and digital operations.
“We closed on two already with Yum! franchisees entering the Habit system and we have more in the hopper,” Gibbs said. “So we're seeing strong demand and interest in becoming Habit franchisees because the unit economics are great to all the reasons why we bought them.”
Even with the record-breaking development figures, Gibbs said supply chain pressures have prevented Yum! from opening as many restaurants as it would like. So there is further upside, backed by the company’s scale, purchasing capability, and the size of franchisees and their access to capital.
“There are certainly going to be some local challenges here and there related to permitting, but again this is where that capabilities that helped us get ahead, plus our larger more sophisticated franchisees who invest ahead, they have sophisticated teams who are driving their development and that's a big asset here, as well,” Gibbs said. “So yeah, we probably left a few units on the table this year as a result of that, but in general, we don't see that as a constraint on our long-term development path.”
Much of the growth going forward will be directed by new leadership. In August, the company announced Kimberly-Clark veteran Aaron Powell as the new CEO of Pizza Hut. He took over for Artie Starr, who became Topgolf’s CEO in April. Also, David Graves, the pizza chain’s U.S. general manager, will be promoted to president of the domestic business in January.
For KFC, Sabir Sami, the brand’s global chief operations officer, will succeed CEO Tony Lowings, who is retiring in March.