Building discipline worldwide. Thats become the focus of our international business
and its working great. In 1998, TRI operated restaurants in 27 countries, and
by the end of 1999, we plan to reduce that to 16 countries by selling our units to
franchisees. Ultimately, well reduce our company-ownership to about 10 key
countries, while the rest of our system will be run by our franchisees and licensees. With
this sharpened focus, we achieved a strong double-digit increase in operating profits for
the third year in a row, despite the economic turmoil around the world.
Looking forward, we expect to open about 800 new units in 1999,
primarily through our franchisees and licensees, while we strategically grow our equity
business in a handful of countries, like China, Mexico, Taiwan, Thailand, Korea and the
United Kingdom. To ensure that our customers receive the same standard of service at both
company-owned and franchised restaurants, weve invested in training our employees
around our customer-focused operating system, CHAMPS, and also have developed strong
franchise support programs.
We also have made much progress establishing consistency in
the way our products are presented to foreign markets, while offering menu variety to
satisfy local tastes. So while our product offerings may vary by country, you can be sure
all are made with the same high quality standards youve come to expect from KFC,
Pizza Hut, and Taco Bell.
|Our international business, like all other companies outside of the
U.S., operated in a difficult world economic climate, especially in Asia. We quickly
responded by developing a strategy of affordable value by offering customers new quality
products at lower prices. It helped that we had some useful learnings from our experience
in Mexico when the peso devalued in 1994.
Overall, Tricons international outlook is terrific: Were focusing our equity
investments better, reducing overhead, increasing our support of franchisees,
clarifying our concepts, and cascading our culture, while building new restaurants and
increasing our operating profits. What could be better?
Peter Hearl (left)
Executive Vice President
& General Manager
Pete Bassi (right)