Yum China Holdings announced that it has entered into a definitive agreement to take full ownership of the Pizza Hut brand on the Chinese mainland in a $1.2 billion deal, a strategic shift that will eliminate ongoing royalty payments to Yum Brands.
The move gives Yum China direct control of one of its most profitable and fast-growing restaurant businesses. The transaction is expected to improve store economics and accelerate expansion, as Yum China pushes to deepen its dominance in the country's casual dining market.
Pizza Hut is currently the largest casual dining restaurant brand in China under the Yum China portfolio. In 2025, the business generated $2.3 billion in segment revenue and $183 million in operating profit. In the first quarter, it posted its 13th consecutive quarter of same-store transaction growth and its eighth straight quarter of margin and operating profit expansion.
Yum China, which operates KFC, Pizza Hut and Taco Bell on the Chinese mainland, said it plans to expand the Pizza Hut footprint to more than 6,000 restaurants by 2028, up from 4,375 locations across more than 1,100 cities and counties today.
The company is also targeting a doubling of Pizza Hut operating profit by 2029 in comparison to 2024 levels.
On moving from exclusive licensee to brand owner, Yum China CEO Joey Wat said, "Ownership will give us greater strategic flexibility to drive innovation across menus, formats and operations."
The transaction comes as Yum China continues to lean on KFC as its primary growth engine. The company said KFC China, which currently operates about 13,450 restaurants, is expected to expand to more than 17,000 locations by 2028, particularly in lower-tier and underserved markets.
Separately, Yum China said KFC China will be eligible for a decade-long financial incentive from Yum Brands that will be tied to system sales growth targets and aimed at supporting continued expansion momentum.
It is not the first time Chinese capital and enterprises have moved to acquire or take control of internationally renowned food and beverage brands.
In 2017, a consortium led by CITIC Group and Carlyle Group acquired 20-year franchise rights for McDonald's on the Chinese mainland and in Hong Kong and Macao. Carlyle exited the investment in 2023, and in October 2024, CITIC Capital completed an additional stake purchase, resulting in the CITIC-led consortium holding a 52 percent controlling stake while McDonald's Corp retained 48 percent.
In November 2025, CPE, a leading Chinese consumer-focused private equity firm, acquired an 83 percent controlling stake in Burger King China, with the parent brand Restaurant Brands International retaining the remaining 17 percent. - China Daily/ANN
