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CMU GRADUATE SCHOOL

KENTUCKY FRIED CHICKEN (KFC)

An Assignment
Submitted in Partial Fulfillment of
the Requirements for the Subject

INTERNATIONAL BUSINESS (MN512)

SUBMITTED TO
LECTURER: Mr. SUON VICHEA

1.

Mr. HONG SAMPHORS

ID:20140601

2.

22 AUGUST 2015
ACADEMIC YEAR: 2014-2015

Cambodian Mekong University

MN512

Kentucky Fried Chicken (KFC)
I.

Overview
1. Company Profile
a. KFC Globally
KFC is a corporation based in Louisville, Kentucky, which is the world's most popular

chicken restaurant chain, specializing in Original Recipe®, Extra Crispy™, Twister® and
Colonel’s Crispy Strips® chicken with home-style sides. It is one of the world’s most popular
fast food restaurant chains in the world founded by Colonel Harland Sanders in 1930.
Every day, more than 12 million customers are served at KFC restaurants in 109
countries and territories around the world—from a Chunky Chicken Pot Pie in the United States
to a salmon sandwich in Japan. KFC operates more than 15,000 restaurants around the world
today, and it is part of Yum! Brands, Inc., which is the world’s largest restaurant system with
over 32,500 KFC, A&W All-American Food™, Taco Bell, Long John Silver's, and Pizza Hut
restaurants in more than 100 countries and territories.
Within the YUM! Brand, Inc., which is the parent company of KFC, their future back
vision is to be THE DEFINING GLOBAL COMPANY THAT FEEDS THE WORLD. This is a
goal that reflects their intentionality to lead the way in defining how to truly build a superlative
global company, a company that sets the example others want to emulate (2010 Annual Report,
David C. Novak).
To lead its global brands, there are 1.4 million system wide team members around the
world, who powered by a powerful financial capability, working to make it happen. Their intent
is to continue to drive shareholder value and as they do, make the world a better place by
building their company around three principles:

Creating a famous recognition culture where everyone counts.

Lecturer: Mr. Suon Vichea

Page 3

b. banking. there are 10 KFC outlets to-date: 1) Monivong Boulevard 2) Sovanna 3) Norodom Boulevard 4) City Mall 5) Kampuchea Krom 6) Riverside 7) ChbarAmpov 8) Attwood business Center 9) ToulTompoung (Russian Market) 10) Siem Reap Lecturer: Mr.  Being a company with a huge heart. The Royal Group. KFC Cambodia KFC was established in Cambodia in March 2008. on the other hand. Suon Vichea Page 4 . a partnership with the Malaysian QSR brands and Rightlink Corporation. is one of the largest conglomerates in Cambodia with substantial investments in media. telecommunications. In Cambodia. vibrant brands everywhere with one system operational excellence as our foundation. and the first restaurant has been situated along Monivong Boulevard. education.Cambodian Mekong University  MN512 Building dynamic. property development and trading. Phnom Penh. It is one of Royal Group of Campanies Ltd (The Royal Group) business.

Suon Vichea Page 5 . purchasing.Cambodian Mekong University MN512 According to the official website of KFC Cambodia. the company has over 200 staffs with some personnel holding key positions in the company such as marketing. KomPong Cham and Sihanoukville in the future. Lecturer: Mr. all payment must be in cash. teens and adults alike. 2. other outlets in the city will be rolled out in stages to increase accessibility and convenient to our customer. and many more. Moreover. Products and Services a. By now. Services 1) Delivery: Delivery hours are from 10am to 9pm. Moreover. It emphasizes that KFC will be available in other populous cities such as Battambang. the contemporary and vibrant design. it is limited to KFC delivery areas only. layout and presentation of KFC are specially designed to appeal to all families. children. Customers can assist KFC staff for correct changes. On the other hand. Products 1) Chicken 2) Burger 3) Rice Combo 4) Side order 5) Add-on 6) Drink b. However. they have to wait 30 minutes to allow the staff to prepare and deliver. and it is free when customers order is more than USD 4.

They will feel free to contact KFC’s hotline 023 996 000 to assist them to make the event. customers can call to KFC if they plan to organize outdoors functions and require meals to be served. 3. Teacher’s Day.Cambodian Mekong University MN512 All the price and information are effective immediately after charge and cannot refund. Celebration of Khmer New Year. Sport’s Day. Birthday Party. Chinese New Year. Each stage in the approval timeline to learn what we currently do at KFC and what you do as a franchisee candidate: KFC –  Review application  Issue Franchise Disclosure Document (FDD)  Verify assets and geographic interests  Conduct and review credit check and franchise profile Lecturer: Mr. Customers will experience KFC’s “so good” food at an affordable price. Entry Mode: As a KFC franchisee. KFC can cater meals for all occasions. 2) Catering: In Cambodia. Company Anniversary. Once we’ve received your application. Suon Vichea Page 6 . we are with you every step of the way and it all starts with your completed application. Get-together. Company Party. and the chicken can be made available to meet and greet upon availability. and so on. Moreover. After Exam Celebration. we’ll assist you through each step of the application process. And the choice of chicken parts is subjected to its availability.

Suon Vichea Page 7 .Cambodian Mekong University  Overview training requirements  Overview Operating Plan outline  Conduct franchising background check MN512 Franchisee Prospect –  Sign and return Franchise Disclosure Document (FDD) receipt  Review FDD and prepare questions  Complete franchising profile  Begin creating operating plan KFC –  Conduct Interview(s)  Discuss Operating Plan to ensure business understanding  Explain site selection  Identify and discuss issues  Conduct operations interview  Set up one and a half day store experience  If Franchise Prospect meets all qualification standards. they are approved as a Franchisee Candidate Franchisee Prospect –  Attend one and a half day store experience (if necessary)  Complete operations plan  Interview as needed Lecturer: Mr.

Suon Vichea Page 8 .Cambodian Mekong University MN512 KFC –  Determine best site selection strategy  Review KFC Development Service options  Discuss scale requirements and future development Franchisee Prospect –  Outline development vision  Identify focus trade area(s)  Align next steps KFC –  Determine best site selection strategy  Review KFC Development Service options  Discuss scale requirements and future development Franchisee Prospect –  Outline development vision  Identify focus trade area(s)  Align next steps KFC –  Complete site registration workbook Lecturer: Mr.

Cambodian Mekong University  Provide Franchise Site Analysis Survey (FSAS) and deposit form  Submit site registration to Brand desk  Determine if proposed site can be cleared for development MN512 Franchisee Prospect –  Complete site deposit form  Remit funds  Sign. Suon Vichea Page 9 . date and remit site analysis survey form KFC –  Provide onboarding support via regular calls  Schedule/conduct appropriate training  Provide development expertise  Provide countdown to opening checklist  Support Grand Opening Franchisee Prospect –  Finance your restaurant  Build your restaurant  Hire your team  Attend appropriate training  Grand Opening KFC – Lecturer: Mr.

layout and presentation of KFC are specially designed to appeal to all families. Painted with red color. KFC is usually situated on any building where many people live around or like to go. the company has over 200 staffs with some personnel holding key positions in the company such as marketing. Lecturer: Mr. it rarely puts its location in shopping centers. the contemporary and vibrant design. the KFC is likely a convenient place to eat and even easy to park. families. However. markets. By now. And this makes customers feel more comfortable since the building is mostly equipped with airconditions. and it is well-decorated with neat chairs and tables for customers to eat on and enjoy dating or talking with their friends. Suon Vichea Page 10 . and so on. in addition to ordering from its hotlines. children. or the like.Cambodian Mekong University  Provide business support  Develop marketing calendar  Provide brand leadership MN512 Franchisee Prospect –  Run a great restaurant – be certified "growth ready"  Execute marketing programs  Build team capability  Create a growth vision  Register and build additional sites II. and many more. 10 KFC outlets are located on very good areas or roads where many people pass by. Moreover. it is very important to choose the right place to display its products and services of KFC since customers can buy from the visual physical areas (restaurants) only. For example. teens and adults alike. special people. Once. Physical Characteristics From what we have observed in the contexts of Cambodia. purchasing.

MN512 Workforce Characteristics 1. worker and product safety. physical disability. but not limited to. regulations. The notices should be in all languages necessary to fully communicate the policy to its employees. national origin. Suppliers Suppliers are required to abide by all applicable laws. state and federal law. sexual. or verbal harassment or abuse be used as a method of discipline or control. nor should threats of violence. Child Labor: Suppliers should not use workers under the legal age for employment for the type of work being performed in any facility in which the Supplier is doing work for Yum. Yum! Brands. equal opportunity. no Supplier should perform work or produce goods for Yum using labor under any form of indentured servitude. sex. Employees should not be required to work more than the number of hours allowed for regular and overtime work periods under applicable local. physical punishment. state or federal laws regarding wages and benefits. Forced and Indentured Labor: In accordance with applicable law. religion. Working Hours & Conditions: In compliance with applicable laws. psychological. In no event should Suppliers use employees younger than 14 years of age. Lecturer: Mr. workmen’s compensation. creed or any other basis prohibited by law. Notification to Employees: To the extent required by law. codes or regulations including. also expects that Suppliers will confirm their practices to the published standards for their industry. or other form of physical. working hours.Cambodian Mekong University III. Non-Discrimination: Suppliers should implement a policy to effectuate all applicable local and federal laws prohibiting discrimination in hiring and employment on the grounds of race. confinement. Suppliers are expected to ensure that their employees have safe and healthy working conditions and reasonable daily and weekly work schedules. age. color. any local. Suon Vichea Page 11 . codes and industry standards. Suppliers should establish company-wide policies implementing the standards outlined in this Code and post notices of those policies for their employees.

safe and discrimination-free work environment. Their success has only just begun as they look forward to the future. It is building a vibrant global business by focusing on four key growth strategies: 1. the parent company of KFC. religion or national origin.  to provide equal opportunity for all in recruiting. Sexual.Cambodian Mekong University MN512 2. gender. commits to continuing the success realized during our first ten years. citizenship or national origin.  to recognize and compensate employees based on their performance. intimidation or any other verbal or physical attack upon a person because of race. IV. Employees Yum! Brands. age. the parent company of KFC. sexual orientation. hiring. Employees are expected to hold themselves accountable to the highest professional standards. racial. one which promises a long runway for growth.  to maintain a professional. Suon Vichea Page 12 . especially on an international level. ethnic. and religious or any other type of harassment has no place in the Yum! work environment. promoting and compensating without regard to race. Core Strategies Yum! Brands. and  to provide a competitive array of benefits. veteran status. and it is the company’s policy:  to deal fairly with employees. Sexual harassment includes unwelcome sexual advances or other verbal or physical conduct of a sexual nature. Build Leading Brands across CHINA in Every Significant Category Lecturer: Mr. recognizes that one of its greatest strengths lies in the talent and ability of its employees. developing. with mutual respect being the basis of all professional relationships. jokes. Human resource goals have been established to guide the company activities in employee relations. color. ethnic and religious harassment includes such conduct as slurs. Racial. disability. religion.

and the franchisees continue to see cash paybacks in less than 3 years on new restaurants. KFC can be every bit as big as McDonald’s is in the US. will likely go up as a results of the strong economic growth in China. the company is off and running. Meanwhile. This made major progress creating new growth vehicles by investing in emerging markets like India. there’s no doubt the calculated investments in high potential markets is paying off. delivery services and continuing to build a solid breakfast business. As a result.200 restaurants in over 700 cities. widening its competitive advantage and getting stronger and more diversified every year. requiring little capital on our part. ultimately reaching 15. The company treasures YRI’s highreturn franchising model with over 90% of new restaurants built by franchisees who generate over $740 million in franchise fees.Cambodian Mekong University MN512 Under the YUM! Brands. continues to deliver on this strategy as it delivered 11% full year operating profit growth prior to foreign currency translation. which operates in over 109 countries and territories outside the US and China. had terrific sales growth and now has very good unit economics.4 million average unit volumes. They are even creating their own Chinese quick service restaurant chain. Lecturer: Mr. tailored to the local favorites based on the amazing insight that Chinese people’s favorite cuisine is. 2010 was a milestone year for their business in India. KFC in India surpassed 100 units. China operating profit has more than doubled in the last 3 years to $755 million. and now there are over 3. And East Dawning is attacking the Chinese equivalent to the hamburger category in the US. This gives us the infrastructure and scale to fuel aggressive growth going forward. Russia and Africa into a truly global brand. Drive Aggressive International Expansion and Build Strong Brands Everywhere Yum! Restaurants International. The good news is that business growth and results were driven by increased traffic as KFC made good progress leveraging its assets with 24-hour operations. making it our Number 1 profit-producing Division in Yum! 500New Restaurants in 2010 2. Chinese food! The way we look at it. believe it or not. KFC business has been absolutely rock solid. with $1. particularly with the KFC brand. KFC added 414 new locations in 2010.000+ units. East Dawning. Suon Vichea Page 13 .

chicken on the bone. Suon Vichea Page 14 . 3. rewarding shareholders for their performance in the marketplace. represents just 3 percent of our YUM! Brands’ overall profits. however. for example. The Company. Ghana and East Africa. on the other hand. and it’s going to take time to execute these plans. In the UK. with each of their divisions generating free cash flow — and effectively funding their own capital investments. Dramatically Improve US Brand Positions. Drive Industry-Leading Long-Term Shareholder and Franchisee Value The YUM!’s share price increased 40% in 2010. That makes the company be a global cash machine. In Africa. and it is believed that it is possible.000 new KFCs added by 2020 in the emerging markets of India. Vietnam. giving us 150 restaurants in total in Russia. Equally important. by offering both fried and non-fried options. The company is now leveraging that powerhouse infrastructure to build new restaurants in Nigeria. to $1. KFC have been transformed over the last decade with product innovation. they will dramatically improve their value proposition to become more portable and upgrade their assets. the average unit volumes rose from about $1 million (where we are in the US today). there will be 3. Overall. They are determined to fix their operations. As a result. which given our explosive international growth. The company is proud to continue as being a leader among consumer companies with Return On Invested Capital (ROIC) at 20%+. thinks that it is a big job ahead of them in the US. Pakistan and the African continent.Cambodian Mekong University MN512 Besides.5 million. Russia. Consistency and Returns The biggest challenge in the US is KFC. The company has a very high intentionality to turn the US business to other parts of the world. the company made an acquisition that gave us full management control of the RostiksKFC brand. it already have been a dominant market position in South Africa with over 600 KFCs. 4. insight-driven marketing and improved operations. and leverage their core business. Lecturer: Mr. And it is extremely happy for the company with how well consumers have taken to the KFC brand and how enthused their franchisees are about the opportunity ahead.

4% yield) with growth of EPS in double digits (17%). any way you it is looked. and pay a meaningful dividend (2. These returns will further improve as they continue to refranchise restaurants as what they have in the US. Yum! Brands is in strong financial shape. Working with a National Training Leader and several Territory Training Leaders. Human Resource Management 1. which covers centralized orientation training in Louisville. KFC Brand training and a variety of KFC franchise information are part of that program. which will increase our franchise fees with minimal capital investment.to 10-week Brand training program. India and Russia. Mexico and Taiwan. KY. As one enters the KFC franchise system. it is one of the unique companies that can continue to make significant capital investments year after year (about $800 million).Cambodian Mekong University MN512 As this capital is deployed to high-growth emerging markets such as China. All in all. Suon Vichea Page 15 . the franchisee will complete an eight. International Staffing Policy KFC believes that quality training and support are the foundation to building every franchise business. and as a result this makes investments in share repurchases exceed cash flows. he or she will have four primary areas of emphasis:  Establishing key contacts  Building restaurant  Building team  Setting the restaurant up to start strong KFC has assembled a comprehensive onboarding program to support in each of these areas. Lecturer: Mr. online training using the KFC Learning Zone and in-store skill practice which the company seeks to organize at existing restaurants near the franchisee’s home base. the company expects total returns to remain strong. V. Bottom line.

a Restaurant General Manager (RGM) and an Assistant Unit Manager (AUM). Suon Vichea Page 16 . Lecturer: Mr. Required attendees include an Above Store Leader (ASL). three key holders will begin a comprehensive training program.Cambodian Mekong University MN512 Fourteen weeks before the restaurant opening (around ground break if a new store is being built).

and they coach and support every individual to grow with their full capability. They actively seek diversity in others to expand our thinking and make the best decision. Methods of Culture Training Two of their major strengths as a company are their employees and their culture. transportation costs. KY Certified Training Store There will be a cost for the training that runs between $3000-10. Believe in All People They trust in positive intentions and believe everyone has the potential to make a difference. These costs are outlined in the Franchise Disclosure Document (FDD). YUM! believes in treating each other with respect and fostering an atmosphere of caring. KFC also believes that ongoing support is necessary for the restaurant and does so with a team of people to provide coaching. lodging and any other living expenses of their trainees in connection with the training program. a Territory Human Resources Manager and a Territory Training Leader.000. consisting of a Territory General Manager.Shift Supervisor Tracks Restaurant Supervisor In-Store Training Restaurant Proficiency Practice Home Office Certified Training Store Home Office Centralized – Louisville. recognition and continuous backing for the franchisee. a Territory Operations Manager. This team. Be Restaurant and Customer Maniacs Lecturer: Mr. The franchisee must also pay for uniforms.Team Member Tracks KFC Perfect Product Training Learning Zone . b. a. also coordinates product and procedure rollouts during the course of the year. KY Week 2 Weeks 3-4 Week 5 Week 6 Week 7-8 Roadmap Learning Zone . meals. Suon Vichea Page 17 . 2. Their “How We Win Together” principles define the culture and how they manage their business.Cambodian Mekong University MN512 The training program covers the following: Week 1 Overview/Building a Great Restaurant Centralized – Louisville. open communications and candor.

c. Finance Lecturer: Mr. pursuing knowledge and best practices inside and outside the company. "What can I do NOW to get breakthrough results in my piece of Yum!?" and their intentionality drives step change thinking. Build Know How They grow by being avid learners. Recognize! Recognize! Recognize! The last but not least. and it makes specific verbal contracts to get big things done with urgency and excellence. d.Cambodian Mekong University MN512 They love running great restaurants and their customers rule. Go for Breakthrough They always begin by asking ourselves. and they have lots of fun doing it! VI. they discuss the undiscussable. Also. Take the Hill Teamwork They team together to drive action versus activity. It’s the foundation for making customer mania come alive. These relationships allow them to ask the earth of each other. Suon Vichea Page 18 . They act with urgency to ensure every customer sees it and feels it in every restaurant. They seek truth over harmony every step of the way and consistently drive outstanding execution by scaling their learnings into process with tools around what matters most. f. They imagine how big something can be and work future-back. and they are maniacal about rigorous execution of our core processes to deliver our Brand Standards as our #1 brand building initiative. always promoting healthy debate and healthy decisions. they attract and retain the best people and inspire greatness by being world famous for recognition because they love celebrating the achievement of others. going full out with positive energy and personal accountability to make it happen. Breakthroughs come when they get people with knowledge thinking creatively. They make sure they have great RGMs who build great teams. e.

Inc. and Subsidiaries (in millions. Lecturer: Mr. Capital 2. Suon Vichea Page 19 . 2009. except per share and unit amounts). 2008. and Pizza Hut South Korea businesses. 2007 and 2006 all include 52 weeks.S.Cambodian Mekong University MN512 1. Shareholders Selected Financial Data YUM! Brands. respectively. (a) Fiscal year 2009 included non-cash charges of $26 million and $12 million to writeoff goodwill related to our LJS/A&W U. Fiscal years 2010.

(c) Fiscal year 2010 included a loss of $18 million related to U. (d) Adjusted for the two for one stock split on June 26. These items are discussed further within our MD&A.S. Fiscal year 2008 included a gain of $100 million related to the sale of our interest in our unconsolidated affiliate in Japan and a loss of $61 million related to U. and the 2010 Mexico and Taiwan refranchising losses described in (b). (e) In addition to the results provided in accordance with U. business transformation measures. Additionally. These items are discussed further within our MD&A. and the 2009 Taiwan refranchising loss described in (b). above. (b) Fiscal year 2010 included U. the Company has provided non GAAP measurements which present operating results on a basis before Special Items. The Company uses earnings before Special Items as a key performance measure of results of operations for the purpose of evaluating performance internally.S.S. 2009 and 2008 Special Items are discussed in further detail within the MD&A. The gains and charges described in (c). a loss upon refranchising our Mexico market of $52 million and a loss upon refranchising our Taiwan market of $7 million. This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP. are considered Special Items. the Company believes that the presentation of earnings before Special Items provides additional information to investors to facilitate the comparison of past and present operations. Suon Vichea Page 20 . refranchising gains described in (b).S. refranchising losses. refranchising gains of $34 million and a loss of $10 million as a result of our decision to offer to refranchise our Taiwan market.S. business transformation measures. 2009 and 2008. 2007. Lecturer: Mr. Fiscal year 2009 included a gain of $68 million related to the consolidation of a former unconsolidated affiliate in China. a loss of $40 million related to U. Rather. including the $26 million goodwill charge described in (a) and the 2009 U. including the 2010 U.S. Fiscal year 2009 included U. Generally Accepted Accounting Principles (“GAAP”) throughout this document. business transformation measures. see Note 9 describing our goodwill impairment expense recognized in 2009.S.S.Cambodian Mekong University MN512 See Note 4 to the Consolidated Financial Statements for a description of our store closures and store impairment expenses in 2010. refranchising losses of $18 million. The 2010. excluding items that the Company does not believe are indicative of our ongoing operations due to their size and/or nature.

Same store sales growth includes the results of all restaurants that have been open one year or more.227. This information is presented as of December 31. and is based on a stock ownership report on Schedule 13G filed by such shareholder with the SEC and provided to them. (g) Local currency represents the percentage change excluding the impact of foreign currency translation. no voting power for 3. unconsolidated affiliate and license restaurant sales are not included in Company sales on the Consolidated Statements of Income.930.703. however. 2.Cambodian Mekong University MN512 (f) System sales growth includes the results of all restaurants regardless of ownership.787 shares and shared dispositive power for 10. Lecturer: Mr. Sales of franchise.100 shares. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all our revenue drivers. Note: The filing indicates sole voting power for 16. Suon Vichea Page 21 .300. unconsolidated affiliate and license restaurants. We believe the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.483 shares. and sole dispositive power for 19.300. the franchise and license fees are included in the Company’s revenues. franchise. Franchise. unconsolidated affiliate and license restaurants generate franchise and license fees for the Company (typically at a rate of 4% to 6% of sales).483 shares. Company and franchise same store sales as well as net unit development. Shareholders: Who are our largest shareholders? This table shows ownership information for the only YUM shareholder known by their management to be the owner of 5% or more of YUM common stock. including Company owned. These amounts are derived by translating current year results at prior year average exchange rates. 2010. shared voting power for 10.687 shares.

Suon Vichea Page 22 . 2010. and all directors and executive officers as a group.000 shares of YUM common stock or stock equivalents. Our internal stock ownership guidelines call for the Chairman to own 336. Directors and executive officers as a group beneficially own approximately 2%.000 shares of YUM common stock or stock equivalents. each of the executive officers named in the Summary Compensation Table (below). 2010 through the exercise of stock options. None of the persons in this table hold in excess of one percent of the outstanding YUM common stock. Guidelines for our other named executive officers call for them to own 50. Under SEC rules.Cambodian Mekong University MN512 How much YUM common stock is owned by our directors and executive officers? The table shows the beneficial ownership of YUM common stock as of December 31. stock appreciation rights or distributions from the Company’s deferred compensation plans. Included are shares that could have been acquired within 60 days of December 31.000 shares of YUM common stock or stock equivalents within five years following their appointment to their current position. beneficial ownership includes any shares as to which the individual has either sole or shared voting power or investment power and also any shares that the individual has the right to acquire within 60 days through the exercise of any stock option or other right Lecturer: Mr. 2010 by each of our nominees for election as directors. Unless we note otherwise. together with additional underlying stock units as described in footnote 4 to the table. The table shows the number of shares of common stock and common stock equivalents beneficially owned as of December 31. each of the following persons and their family members has sole voting and investment power with respect to the shares of common stock beneficially owned by him or her. Other executive officers are required to own 24.

Suon Vichea Page 23 . 33. For stock options. For SARs we report the shares that would be delivered upon exercise (which is equal to the number of SARs multiplied by the difference between the fair market value of our common stock at year-end and the exercise price divided by the fair market value of the stock). These amounts include the following shares held pursuant to YUM’s 401(k) Plan as to which each named person has sole voting power: Mr. Novak.Cambodian Mekong University MN512 (1) Shares owned outright. we report shares equal to the number of options exercisable within 60 days. Lecturer: Mr. (3) These amounts reflect units denominated as common stock equivalents held in deferred compensation accounts for each of the named persons under our Directors Deferred Compensation Plan or our Executive Income Deferral Program. Amounts payable under these plans will be paid in shares of YUM common stock at termination of employment/directorship or within 60 days if so elected.923 shares (2) The amounts shown include beneficial ownership of shares that may be acquired within 60 days pursuant to stock options and stock appreciation rights awarded under our employee or director incentive compensation plans.999 shares and all directors and executive officers as a group. 30.

Contest & awardGame to win a lot of prizes 2. For Messrs. . 1. Kids Marketing organized a surprise Chicky Carnival bash for the first time to reward members and also invite non-members to come join in the fun. There were 10 game booths. Lecturer: Mr. This event has about 3. The program are: Chicky dance. 2010. Those program are including Key Kids. Coloring Contest. stage game. Suon Vichea Page 24 . One day carnival was held on Sunday 25th July 2011 at Night Market. and so on. (5) This amount includes 26. Chicky Carnival 2011 In conjunction with Chicky Club's new recruitment launch.000 shares held in IRA accounts. Hey Kids! Chicky goes to school is to provide new “out-of-class” fun & learn experience with Chicky. Novak and Su. groups game encouraged participation from family members which made it a very family oriented event as well as for kids. amounts also include restricted stock units awarded in 2008 and 2010. respectively. Social Responsibility There are several programs arranged by KFC Cambodia to get involved with society and to make fun to their customers in order to improve their life quality.Cambodian Mekong University MN512 (4) Amounts include units denominated as common stock equivalents held in deferred compensation accounts which become payable in shares of YUM common stock at a time (a) other than at termination of employment or (b) after March 1. Chicky Carnival.000kids & parents. (6) All shares are held in a margin account. VII. KFC Concert.

drink. Chicky Carnival 2012 This year also not different from last year. There were 10 game booths. balloon. colour pen on event day. 4. Candy. ticket can redeem food. groups game encouraged participation from family members which made it a very family oriented event as well as for kids. Suon Vichea Page 25 . Kids need to purchase ticket for participate the event.Cambodian Mekong University MN512 3. Chicky Club's member and non-members are invite to Chicky Carnival Event on Sunday 15th January 2012 at Night Market is about 3.500kids & parents. Coloring contest Coloring contest most of the time we do it in KFC’s outlets. KFC toy and KFC bags Lecturer: Mr. stage game. Award : Hampers. On International Children’s Day or Store coloring contest.

Customer Mania: We listen and respond to our customers and are obsessed about going the extra mile to make them happy. on 2 & 3 October 2010. Accountability: We do what we say and take responsibility for our actions. KFC Concert At KFC. they are what we incorporate into everything we do. This is the power of the KFC brand. Event: Koh Pich Island. We act like owners. trust in positive actions. Coaching & Support: We learn from each other and always help each other out. KFC was organized a concert 2010 with the chance to win a grand priz-Yamaha Fino and other a lot of prizes. encourage ideas from everyone and fashion a workforce that is different in style and background. Outlined for you below. VIII. Belief in People: We believe in people. Recognition: We find reasons to celebrate the achievements of others and have fun doing it.Cambodian Mekong University MN512 5. you'll notice similarity in the quality of our service. Suon Vichea Page 26 . we always made it simple for customers to enjoy rewards and great promotions. Lecturer: Mr. Culture and Value Our values are what we like to call our "How We Work Together" principles. Executional Excellence: No matter which restaurant you work in.

It made people in the country dead. Suon Vichea Page 27 . We're not interested in hierarchy and all the nonsense that comes with it. So all investors not only Lecturer: Mr. always.18/Mar/1970 Social of People Monarchy 18/Mar/1970 . we make sure we get together to talk things through. And until 1997. so it made the Country to be turmoil. Cambodia still meet problem because some parties didn’t get along with each other. Political and Legal System 1.23/May/1993 Republic Of Kampuchea 23/May/1993 – Now Constitutional Monarchy 2. Teamwork: We work together as one team. Political System Cambodia's political system is a product both of the country's troubled and oftentimes turbulent modern history and of factors rooted deeply in its premier development. This article examines the political and governmental units that constitute Cambodia's political system and explores the political system in terms of its current structures and its historical development. unsafe and so on.9/Nov/1953 French Colonial 9/Nov/1953 .17/Apr/1975 Khmer Republic (LunNol) 17/Apr/1975 . Era Political System 11/Aug/1863 .07/Jan/1979 Khmer Rouge Regime (Pol Pot) 07/Jan/1979 – 1989 People’s Republic Of Kampuchea 1989 . Political Risk Cambodia has met a lot of war over two decades from 1970s.Cambodian Mekong University MN512 Positive Energy: We work with passion and energy. IX. No matter how busy we are.

Article 17 Investors in the Kingdom of Cambodia shall be free to hire Cambodian nationals and foreign nationals of their choosing in compliance with the labor and immigration law. All of these reasons can attract investors to invest in Cambodia more and more. including long-term leases of up to a period of 70 years. 3. Law System For the Law system that related to investment in Cambodia that all the investors must follow: Article1 This Law governs all investments projects made by investors who are Cambodian citizens and/or foreigners within the Kingdom of Cambodia. and government controlling is better. renewable upon request. In the event of such hiring. appropriate documentation including the Lecturer: Mr.Cambodian Mekong University MN512 international investors but also national investors don’t want to invest in Cambodia. but now there are many investors come to invest in Cambodia such as Metfone Company because nowadays Cambodia’s political risk is better than before. safety. Article 16 In accordance with the Constitution and relevant laws and regulations pertaining to the ownership and use of land: 1. Ownership of land for the purpose of carrying on promoted investment activities shall be vested only in natural persons holding Cambodian citizenship or in legal entities in which more than 51% of the equity capital are directly owned by natural persons or legal entities holding Cambodian citizenship. Article 18 The investors shall be allowed to hire foreign employees who are listed in Article 14 (6) provided that: 1. Upon such use may include the right of ownership of real and personal property situated on the land as may be permitted by the law. Suon Vichea Page 28 . 2. Use of land shall be permitted to investors. The qualification and expertise are not available in the Kingdom of Cambodia among the Cambodian populace.

Article 24 Investments authorized under the previous “Law on Investment” of the State of Cambodia and its Sub-Decrees shall be subject to the same benefits and obligations as stated under this Law. in the event that the dissolving company had used machineries and equipment which were imported duty free for less than five years. and a curriculum vitae shall be submitted to the Council. Article 21 In the event a promoted company intend to end its activity in the Kingdom of Cambodia. it will have to inform the Council through either a registered letter or a hand delivered letter stating the reasons of such a decision. Promotion of Cambodian staff to senior positions will be made over time. 3.Cambodian Mekong University MN512 photocopies of the employee's passport. Article 25 In the case where the promoted company violates or fails to comply with the conditions stipulated by the Council. Suon Vichea Page 29 . This law is not retroactive. in whole or in part. Article 22 In the event of a proposal for a dissolution of a company without judicial procedures. the investor can transfer the remaining proceeds of its assets overseas or use them in the Kingdom of Cambodia. which letter shall be signed by the investor or his attorney-in fact. Investors shall have the obligation to provide adequate and consistent training to Cambodian employees. Article 23 Once the investor is allowed to officially dissolve his company or enterprise either within the judicial procedures or not. certificate and/or degree. the Council shall have the power to withdraw the rights and benefits granted to him. complainants and claims from the Ministry of Economy and Finance before the investor is allowed to officially dissolve his company or enterprise according to the applicable commercial law. the investor shall provide proofs to the Council that the company has properly settled its potential creditors. However. the company will have the obligations to pay the duties applicable to those machineries and equipment. 2. Lecturer: Mr.

A nation's GDP at purchasing power parity (PPP) exchange rates is the sum value of all goods and services produced in the country valued at prices prevailing in the United States. The differences between the OERand PPP-denominated GDP values for most of the wealthy industrialized countries are generally much smaller. The Cambodian government is working with bilateral and multilateral donors. The roadmap being used to plan the trade strategy is “Pro-Poor Trade Development Strategy endorsed by the Council of Ministers and presented to the international community at the Tokyo CG meetings in June 2001. In 2006. MN512 Economic Condition 1. and preparing for WTO accession. Suon Vichea Page 30 . The long-term development of the economy remains a daunting challenge. Inflation The inflation in Cambodia is not constant. 2. For many developing countries. Lecturer: Mr. particularly in the northern parts of the country. as an early contribution to the policy development process.Cambodian Mekong University X. The major economic challenge for Cambodia over the next decade will be fashioning an economic environment in which the private sector can create enough jobs to handle Cambodia's demographic imbalance. and several rounds of discussions have been held since 2007. XI. a US-Cambodia bilateral Trade and Investment Framework Agreement (TIFA) was signed. Rubber exports increased about 25% in 2009 due to rising global demand. PPP-based GDP measures are multiples of the official exchange rate (OER) measure. as a key component of the overall national socioeconomic development and poverty reduction strategy. Level of Development Mining also is attracting significant investor interest. to address the country's many pressing needs. The study provides a preliminary analysis of Cambodia’s competitive position with respect to trade. including the World Bank and IMF. Government Trade Policy The Royal Government of Cambodia (RGC) is in the process of developing a trade sector strategy.

given the appropriate international regulatory framework. Impact analysis of trade policy reforms must take place in the context of overall poverty reduction policy formulation and implementation. must be prefaced by comprehensive poverty impact analysis. through robust social and economic structures at the national and community levels. Development strategies which put a premium on aggregate growth targets. Pro-poor trade strategy development requires sufficient time for participatory poverty impact analysis and Lecturer: Mr. to identify policy instruments and sector specific strategies which will most effectively target poverty reduction to ensure broad-based development with equity. These trade policy development processes are intended to be pro-poor. the type of growth and trade strategy to pursue should be based on clearly demonstrable links between various trade policy alternatives and poverty reduction indicators. enterprises. Strengthening human capabilities and the domestic economy. sequencing and distributional aspects of trade and economic policy reform. but the supporting documentation has yet to clearly demonstrate a positive correlation between the type of trade strategy suggested and the actual reduction of poverty in the Cambodian context The NGO community strongly recommends that in order to effectively realize poverty reduction. Integration through trade is creating new opportunities but these are available only to economic actors (whether countries. infrastructure and education. Thus there is a crucial link between trade policies and other macroeconomic and fiscal policies. trade can play an important role in poverty reduction. The RGC’s future trade policy should consider the pace. emphasizing investment in specific “profitable” economic sectors. is a necessary prerequisite to a reduction in trade barriers as part of international integration.Cambodian Mekong University MN512 Trade policies under consideration by government and donors promote an export-led growth approach through rapid liberalization and further integration into the global economy. or individuals) with access to productive assets. However. The current global trade system is biased against developing countries and in particular poor producers and net consumers or subsistence farmers and fishers within these countries. and their implementation. Suon Vichea Page 31 . Increases in income gained by better-off sectors of society and foreign companies can only contribute to poverty reduction if part of this income returns to the government budget for redistribution into spending targeted at poorer segments of Cambodian society (through spending on improving access to services or increasing productivity).

the government has strengthened the country's legal framework. and became a member of the Association of Southeast Asian Nations (ASEAN) in 1998. Investors can set up 100% foreign-owned investment projects and employ skilled workers from overseas. in cases where these workers cannot be found in the domestic labor force. Small-scale producers. Environmental variable impacts to KFC operations Lecturer: Mr. bolstered its institutions and liberalized the relevant regulations. and factory workers are amongst those most heavily affected by trade strategy. the Law on Investment and its related Sub-Decree grant generous incentives to investors. including the UN and its specialized agencies. Suon Vichea Page 32 . in ways that are conducive to private sector investment and business activities in Cambodia.Cambodian Mekong University MN512 stakeholder consultation. the government has established an institution to oversee investment policy and strategy called the Council for the Development of Cambodia (CDC). On October 13. XII. Foreign Policy Relations Cambodia has established diplomatic relations with most countries. Cambodia became the 148th member of the World Trade Organization (WTO). XIII. XIV. fishers. Attention is also accorded to private investment in Build-Operate-Transfer (BOT) projects.Cambodia is a member of the World Bank. and the Asian Development Bank (ADB). the International Monetary Fund. farmers. especially those concerned in investment projects geared towards exports. Business Environment and Recommendation 1. It has also signed agreements with the ADB. 2004. providing private sector investors with the opportunity to obtain funding for their investment projects from this international financing institution. and private investment in infrastructure. including the United States. The country is a member of most major international organizations. including public utilities such as electricity. In addition. Government Foreign Investment Policy In order to attract FDI. water supply and telecommunications. In order to facilitate investors in their applications for investment approval.

franchisee will have four primary areas of emphasis:  Establishing key contacts  Building restaurant  Building team  Setting the restaurant up to start strong These strategies would help to improve its company core competencies. In Cambodia. KFC’s Corporate Social Responsibility is the key matric uses to attract its customers and attack its competitors.. however. Cambodia as a whole right now is much improved in businesses investment both local and foreign investment while government takes intention to participate in helps to any new businesses. It take 30 minutes to deliver its product to order point that is a waiting service customers might dissatisfy. the location is still the barrier to KFC. KFC can build up culture with all the regions where it is located. services. Moreover. KFC is so successful in Cambodia is the last few years. KFC believes that quality training and support are the foundation to building every franchise business. 2. KFC take advantages to take its skilled workers from the parent company to help in its production. investor must apply for business registration at the ministry of commerce. Suon Vichea Page 33 . Not only KFC. and team building it makes up to show to the public. he has to recheck its staff on daily service to the customers in the restaurants. KFC in Cambodia faces the payment issues ask all payment must be in cash. The service in house is the barrier to grow. In this case. which known ask the corruption. Moreover. KFC must reconsider its consumption chain so that it can gain advantages over the competitors. KFC is still limited in delivery service. but almost all businesses in Cambodia are much less impact from political. to launch the business in Cambodia. Customers can assist KFC staff for correct changes. in cases where these workers cannot be found in the domestic labor force. However. There are some places where KFC cannot reach to its customers. However. in production chain. As one enters the KFC franchise system. In reality as we have observed in place. any outside expenses to the officers at where investors can apply legal to their businesses is also the big barriers. as the manager of KFC. The political is not the barrier to the KFC since it is own by Cambodian business group_ Royal Group Companies Ltd. The complicated processes of the application form of business registration might be the barriers to investors. it has staff training program on production chain.Cambodian Mekong University MN512 Council for the Development of Cambodia provides investors can set up 100% foreignowned investment projects and employ skilled workers from overseas.. KFC customer Lecturer: Mr. KFC mostly imports from the franchiser in Malaysia where this made KFC a week point. they have to wait 30 minutes to allow the staff to prepare and deliver. In consumption chain. Recommendations As the franchise business model.

all the mentions points above have to take action in so that KFC can improve its business throughout Cambodia. Suon Vichea Page 34 . Lecturer: Mr. Finally.Cambodian Mekong University MN512 service on-board where customers order food was not so good. they have to wait or re-order so that they can get food.

com . 2010 annual customer mania report Restated Articles of Incorporation of YUM.References Yum! brands.kfc.kh www.1 on Form 8-K filed on November 23. Inc. which is incorporated herein by reference from Exhibit 3. 2008. which are incorporated herein by reference from Exhibit 3.1 to YUM’s Annual Report on Form 10-K for the fiscal year ended December 27. Amended and restated Bylaws of YUM. www.com.kfc. 2009.