Taco Bell is owned by YUM! Brands Inc.
YUM! Brands, Inc.
1441 Gardiner Ln.
Louisville, KY 40213
Yum! Brands took its original name, TRICON, from the three brand icons -- KFC, Pizza Hut, and Taco Bell -- it inherited from former parent PepsiCo. The soft drink company entered the fast-food business with its acquisition of Pizza Hut in 1977. The pizza chain had begun in 1958 when brothers Dan and Frank Carney borrowed $600 from their mother and opened the first Pizza Hut in Wichita, Kansas, with partner John Bender. Their first franchise opened the next year in Topeka, Kansas. By 1971 the company had become the world's largest pizza chain, with more than 1,000 restaurants. Pizza Hut went public the following year. The chain had grown to 3,000 locations by the time it was acquired.
In 1978 PepsiCo acquired Taco Bell. After trying other fast-food formats, Glen Bell settled on the Mexican-style market. He bought and sold several chains before beginning Taco Bell in Downey, California, in 1962. The first franchise was sold two years later, and by 1967 -- the year after it went public -- Taco Bell had more than 335 restaurants, most of them franchised.
KFC was acquired in 1986. It had been founded by Harland Sanders -- that's Colonel Sanders to you -- who developed his secret, 11-herbs-and-spices recipe and method of pressure-frying chicken during the 1930s. The Colonel began franchising the secret in 1952 and founded Kentucky Fried Chicken in 1955. More than 600 outlets in the US and Canada were open by 1963. It went public in 1969 and was operating some 6,600 units in 55 countries when it was acquired by PepsiCo.
Through these acquisitions, PepsiCo hoped to diversify and build sales channels for its beverages. But the company had incurred huge debt, and fast-food competition had intensified. As same-store sales faltered, shareholders clamored for PepsiCo to spin off the restaurants. Restaurant officials grumbled that PepsiCo put more effort into marketing blitzes than into building restaurants (its 1991 renaming of Kentucky Fried Chicken as KFC didn't fool many health-conscious consumers).
In 1997 PepsiCo created a new restaurant subsidiary, which it spun off in the fall as TRICON. To improve cash flow, TRICON stepped up efforts to close or franchise underperforming Pizza Huts and KFCs. TRICON began opening "three-in-one" restaurants featuring all its brands under one roof. In 1998 it launched a Taco Bell advertising campaign featuring a bilingual Chihuahua; the sassy pooch quickly became a cultural icon.
In 1999 the KFC, Taco Bell, and Pizza Hut cooperatives joined to form Unified FoodService Purchasing, the largest purchasing cooperative for fast-food restaurants in the US. Also in 1999 TRICON spent some $2 billion on a massive Star Wars: Episode I -- The Phantom Menace promotion that failed to increase traffic at its restaurants. Vice chairman David Novak took over as CEO in 2000. Also that year the company joined Burger King in lending $150 million to its distributor, AmeriServe (now McLane Foodservice), which had filed for bankruptcy. The following year TRICON began experimenting with debit and credit cards at Pizza Huts and KFCs. It also opened more than 300 multibranded sites.
In 2002 TRICON acquired Yorkshire Global Restaurants for $320 million, which brought Long John Silver's and A&W All-American Food Restaurants into the fold. Now a five-pack of well-known brands rather than a trio, TRICON changed its name to YUM! Brands. Later that year it formed a joint venture with Favorite Restaurants Group (the franchisee of more than 110 KFCs and Pizza Huts in Indonesia and Hong Kong) to open a chain of Yan Can Asian restaurants based around popular international chef Martin Yan. In April 2004 YUM! Brands dissolved its partnership in Yan Can and liquidated the business.
Being market leaders did not save YUM!'s chains from the overall downturn in the economy, however, nor from the effects of changing eating habits as Americans sought healthier meal alternatives. KFC was hit particularly hard, prompting the company to appoint veteran Gregg Dedrick the chain's new president in 2003. Both KFC and Pizza Hut saw same-store sales and the number of transactions decline in the US during 2003.
The company sold its Puerto Rican operations in 2004 for an undisclosed sum.