Building discipline worldwide. That’s become the focus of our international business — and it’s 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, we’ll 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, we’ve 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 you’ve 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, Tricon’s international outlook is terrific: We’re 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)
President