With over 40,000 locations in more than 125 countries spanning six continents, Yum is the world’s largest restaurant operator in terms of the number of outlets. It has more than 6,000 locations in China alone. Best known for three chains--KFC, Pizza Hut and Taco Bell--Yum has a global workforce of more than 500,000 (mostly part-timers) and total revenues of about $13 billion, putting it well behind McDonald's by that measure.
Yum's main brands were launched separately in the 1950s and 1960s and were later acquired by beverage giant PepsiCo (Pizza Hut in 1977, Taco Bell in 1978 and KFC, then known as Kentucky Fried Chicken, in 1986). Being in the fast food business was not as big a boost to its soft drink sales as PepsiCo had hoped, so in 1997 it spun off those operations into a company called Tricon Global Restaurants. Five years later, Tricon acquired Yorkshire Global Restaurants, operator of the Long John Silver's and A&W chains, and renamed itself Yum! Brands (those chains were sold off in 2011).
Yum has lobbied heavily to keep down its labor costs while also resisting a growing campaign by fast food workers to raise wage levels. The company has also been embroiled in controversies concerning food safety and animal cruelty.
Yum’s first significant foray into politics came with its opposition to California’s Proposition 72. The initiative, mirroring a bill that had already been passed by the state legislature, required larger businesses (including Yum) to offer health benefits to their workers. The company contributed $470,000 as one of the chief funders in the often misleading but ultimately successful effort to defeat the measure in 2004.
After this victory, Yum increased its political expenditures at both the state and federal levels, in part by joining the American Legislative Exchange Council (ALEC) and the National Restaurant Association, two groups that push a variety of policies to weaken worker rights and suppress wage levels. In 2012, amid an intense campaign to get companies to dissociate themselves from ALEC because of its association with voter suppression and "stand your ground" laws, Yum withdrew from the group.
While fighting for the ability to deny its lowest paid employees decent healthcare coverage, a living wage and time off to recover from illness, Yum was lobbying for a way to profit from poverty. In 2011 the company launched a campaign to get more states to allow some participants in the Supplemental Nutrition Assistance Program (mainly the disabled and the elderly) to use their food stamps in fast-food establishments. The effort was not successful.
What made Yum's initiative all the more controversial was that the ranks of food stamp recipients include many of its own employees. A large portion of Yum’s domestic employees (86 percent of whom are employed part time) are compensated so little that they must rely on social safety net programs to feed their family or provide other basic necessities. As a result, according to an estimate by the National Employment Law Project, taxpayers have to pick $648 million a year in costs for providing these benefits to Yum's employees.
In addition to blocking proposed legislation that would benefit its poorest employees, Yum has on numerous occasions been accused of violating fair labor standards regulations. Beginning in 1997 Yum and its chains have faced a series of major overtime lawsuits. In each case, Yum either took the case to court and lost (Oregon in 2001) or agreed to a settlement (Washington in 1997, California in 2006, and Colorado in 2013).
Yum has also been accused of violating minimum-wage rules in China, where the minimum can be the equivalent of less than $1 an hour.
In 2001 the Coalition of Immokalee Workers targeted Taco Bell in its campaign to pressure major purchasers of tomatoes so that they would in turn get growers to improve conditions faced by the migrant workers who pick the tomatoes. After initially resisting, Taco Bell agreed in 2005 to enter into a three-way agreement that guaranteed significant improvements for pickers.
In 2003 the U.S. Equal Employment Opportunity Commissioned announced that Pizza Hut would pay $360,000 to settle sexual harassment charges brought by female workers at an outlet in California. In 2009 Taco Bell agreed to pay $350,000 to settle similar charges involving an outlet in Memphis.
Yum's chains have also run afoul of child-labor rules. In 1997 Pizza Hut, while still owned by PepsiCo, was fined $194,000 by the U.S. Labor Department for violating rules barring workers under the age of 18 from operating equipment such as slicing machines. In 2006, KFC was fined A$3,000 by Australian authorities for requiring two 14-year-olds in Perth to work beyond the curfew set for younger workers. Six years later, KFC was docked A$30,000 for similar violations in the same city.
Yum's chains were among the targets of a new movement of U.S. fast-food workers that was launched in 2012. In November of that year, a group called Fast Food Forward organized a series of rallies and short-term walkouts at various chain outlets in New York City to express support for higher wages and unionization. Focusing on a demand for an increase in industry wages to $15 an hour, the walkout movement, with substantial support from the Service Employees International Union, spread to other cities such as Chicago, St. Louis, Detroit, Seattle, Milwaukee and Kansas City. The strike escalated in the summer of 2013 leading up to a national day of strikes on August 29.
Over the years, Yum's outlets have been involved in numerous scandals involving unsafe and unsanitary conditions. For example, in 2005 a Long Island man sued KFC, alleging that he swallowed a metal rod that was in a piece of chicken he had been served. In 2007 New York City health officials ordered a Yum franchisee to temporarily close several KFC, Pizza Hut and Taco Bell outlets that were said to be overrun with rats. In 2012 KFC outlets in Jordan were forced to close temporarily after they were found to be serving spoiled meat.
While Yum has sought to blame individual store operators for such incidents, the company has also been involved in instances of widespread food contamination. For example, in 2006 the company's Taco Bell chain experienced an E. coli outbreak in its northeastern U.S. outlets that sickened dozens of its customers.
In 2013, Yum had to issue an apology after it was reported that KFC outlets in China were using chickens grown with illegal quantities of antibiotics. The company also admitted that it had known about and had concealed the problem.
Yum's brands have also frequently been the focus of controversy over health impact of their offerings. In 2004, KFC was prohibited from making unproven claims about possible health benefits of its food as a part of a settlement with the Federal Trade Commission. The agreement was the result of an investigation of a marketing effort by the company to convince customers they could enjoy fried chicken as part of a healthy, balanced diet.
In 2006 the Center for Science in the Public Interest sued KFC over its use of trans fats, which had been identified as a key cause of heart disease. CSPI withdrew from the litigation after the chain agreed to phase out the practice.
In July 2014 Pizza Hut and KFC outlets in China had to stop using meat from the Shanghai Husi subsidiary of the U.S. company OSI Group after Chinese media reported on grossly unsanitary conditions at Shanghai Husi's operations as well as the shipment of products after their expiration dates.
For years, animal rights groups such as PETA have accused KFC suppliers of employing inhuman practices in their poultry processing. In 2005, two members of KFC’s Animal Welfare Advisory Council (AWAC) resigned after being asked to sign a confidentiality agreement that would have prohibited them from speaking publicly. Other council members later followed suit. PETA's website contains undercover footage of gruesome slaughterhouse conditions.
A 2006 Greenpeace investigation found that a large portion of the soybeans used to feed chickens served in KFC’s European outlets had been grown in deforested areas of the Amazon rainforest. A 2012 report from Greenpeace stated that KFC was using packaging made of material sourced from rainforest timber. The group accused KFC of endangering the rainforest habitat of the Sumatran tiger.
Other Information Sources
Violation Tracker summary page
Watchdog Group and Campaigns
Key Books and Reports
Behind the Kitchen Door by Saru Jayaraman (ILR Press, 2013).
Big Business, Corporate Profits and the Minimum Wage (National Employment Law Project, July 2012).
Chew On This by Eric Schlosser and Charles Wilson (Houghton Mifflin, 2006).
Fast Food Nation by Eric Schlosser (Houghton Mifflin, 2001).
Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast-Food Industry (University of Illinois at Urbana-Champaign and UC Berkeley Labor Center, October 2013).
Going Nowhere Fast: Limited Occupational Mobility in the Fast Food Industry (National Employment Law Project, July 2013).
Roadside Empires: How the Chains Franchised America by Stan Luxenberg (Viking Press, 1985).
Super-Sizing Public Costs: How Low Wages at Top Fast-Food Chains Leave Taxpayers Footing the Bill (National Employment Law Project, October 2013).
Researched by Thomas Mattera
Last updated July 28, 2014