Chris Turner, its chief financial officer, said at a recent investor conference that the company is looking for another brand to buy.
Turner said at the conference that they were keeping their eyes open. We're always looking for things. The Mediterranean-foods area is intriguing. We're studying a lot of interesting categories.
Mark Kalinowski, a veteran analyst, told Insider that with valuations sputtering in a tough macroeconomic climate, it's not surprising that Yum Brands might be looking to expand. Kalinowski said earlier this year that the owner of Burger King and Popeyes was looking to buy a big fast food brand.
Kalinowski said in an interview that now might be a good time to make a deal. Do you care if we go into a recession six months from now?
According to Turner, a new store was opened every two hours. The company and its franchisees own and operate more than 53,000 restaurants in 155 countries under a number of brands.
Habit was purchased by Yum Brands in March 2020 for $375 million, making it the company's most recent acquisition. The burger chain from California filled a hole in the portfolio and a Mediterranean buy could do the same, according to Kalinowski.
Kalinowski told Insider that it was a bet on the future of the segment if the company went Mediterranean.
The seven chains that Kalinowski identified could be a good fit for the company. The founder of Kalinowski Equity Research added Smoothie King and Sweetgreen as possible acquisition targets due to their lower stock values.
The company does not comment on speculation, according to a spokesman.
The data was obtained from Datassential's "Firefly 500" report and Kalinowski. The full list can be found below.
There are 168 units in the year 2021.
$168 million (Cava), $206 million (Zoe's Kitchen) will be sold in the year 2020.
The average unit volume is $1 million.
The owner of Cava Group bought a kitchen chain for $300 million. Cava, a fast-casual chain known for its Mediterranean food, took the publicly traded Zoe's private and began changing its name. 327 restaurants were encompassed at the time of the acquisition. According to Datassential's "Firefly 500" report, there has been a decrease in that number.
Kalinowski believes that the Cava Group concepts are the most likely Mediterranean concepts to be acquired by Yum Brands. They are the two largest concepts within the Mediterranean sector, and they generate the largest average unit volumes. Mediterranean is growing because it has a healthy halo and people seem to be slowly moving towards eating a little healthier.
There are 88 units in the new year.
A total of $121.9 million was sold in 2011.
The average unit volume was over one million.
The Halal Guys, which started in the 1990s as a New York City food cart, is known for its chicken-and-rice platter. The company started franchising in the year 2004.
Kalinowski thinks that he gave this brand an outside chance of success. It's delicious. He said that it does not carry a healthy halo. I don't think the company is interested in any old Mediterranean concepts. When people think of the brand, they think of healthy food.
The units in the year 2021.
Sales will be $55.1 million in 2011.
The average unit volume was $485,000.
Nelson Lang, the founder of Pita Pit, wanted to provide a healthy alternative to fast food restaurants. The Pita Pit USA was founded in 2005. Chicken souvlaki, salads, gyros, and build-your-own bowls are available at the chain.
According to Kalinowski, Pita Pit is a small chain with a much lower AUV than the rest of the concepts on the list.
The units are 48 in 2011.
In the year 2021, sales are expected to reach $57 million.
The average unit volume was over one million.
The San Diego-based fast-casual chain is known for its kabobs. The chain claims to use non-genetically modified ingredients.
Kalinowski said that Luna Grill's menu seemed to him to be in line with something that the company might be interested in.
The units are 150 in 2011.
There will be $210 million in sales in 2011.
The average unit volume was over one million.
The salad chain was created to show that fast food could be good for you. The 140 unit chain filed for an initial public offering. The market value of the chain was $3 billion when it went public.
Kalinowski said that Sweetgreen's stock increased on opening day and closed at $53 per share. The stock closed at $12.95) on November 28th. He wrote in this week's analyst note that Sweetgreen has a current market cap of over one billion dollars. If Sweetgreen's stock price goes down from current levels, would Yum Brands be interested in buying it?
Kalinowski mentioned Chop't as a possibility. The chain generated over 1.5 million dollars.
The units in the year 2021.
There will be $950 million in sales in 2011.
The average volume of units is $900,000.
There is a made-to-order menu at the chain.
Kalinowski said that the chain is the 53rd largest restaurant concept in the US. Tropical Smoothie Café may be looking to go public in order to get a valuation of $1 billion, according to a report in January 2022. There have been a lot of changes in the equity markets. Maybe the owners still prefer the IPO route, but maybe they would be willing to consider a serious offer from a potential acquisition.
Smoothie King and Planet Smoothie are privately held. Tropical Smoothie Café has better unit economics than the other two chains.
Smoothies are seen as a more likely space for the company to get into than salads. "Salad concepts seem to do best in urban areas, but we believe Yum Brands would more likely seek to acquire a concept that does well in suburbs and exurbs." Smoothies over salads is what we think that suggestion suggests.
The units for the year are 538.
There will be $433 million in sales in 2011.
The average volume is $80,000.
Dutch Bros Coffee, located in southern Oregon, sells espresso-based drinks and other specialty coffee beverages. The chain went public. It was worth more than $5 billion after the public offering.
In March 2021, before Dutch Bros went public, Kalinowski said that Yum Brands should be looking for its next acquisition in the lucrative coffee/cafe segment.
He said in a note that it was the most habit-forming menu item he had ever seen.
It would've made the most sense to target Dutch Bros when it was private.
He said that it is publicly traded. It would be an expensive purchase for the company, since it has a bigger market cap.
The units for the year of 2021.
The sales for the year are $218.7 million.
The average volume of units is $820,000.
In 1995 the coffee chain opened its first store.
Kalinowski said that he didn't think it had the appeal of Dutch Bros and brand positioning that was unique.
Kalinowski said that adding a coffee concept like Biggby would fill a part of the brand portfolio that the company doesn't have.
It's a meaningful part of the restaurant industry now. It's not the dumbest thing to find a concept that can compete in that space.
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