Exclusive: KFC Boss On Middle East Expansion

Watching 300 of Dubai’s most eminent business leaders chanting and dancing, reminiscent of the infamous YMCA jig, at 10 am on a Wednesday morning at the plush Ritz Carlton hotel, is not something I imagined I’d ever witness. But seeing is believing, and only one man in the room could have convinced the others to embrace the madness.

That man is David Novak, one of the world’s leading business minds.

Chairman and CEO of Yum! Brands Inc, the umbrella company behind Pizza Hut, KFC and Taco Bell, Novak has an impressive resume. Featured as one of the world’s 30 Best CEOs by Barron’s, one of the Top People in Business by Fortune and one of the 100 Best Performing CEOs in the World by Harvard Business Review, David Novak has understandably drawn a large crowd to a power breakfast this morning in the heart of DIFC.

Part ‘power breakfast’, part promotion for his new book, Taking People With You, Novak gave an impressive hour-long talk consisting mostly of anecdotes and his rise to the top at one of the world’s most profitable companies. But beginning the day by convincing his audience to chant “Y-U-M”, while of course doing the obligatory arm movements, gave a small sense of the unique culture and environment that he talks of encouraging within the Yum! brand.

Speaking with him privately afterwards, where he is far more reserved and has evidently put on his business hat – though still with a slight sparkle in his eye – Novak spoke of the success that Yum! was achieving in the Middle East and, its expansion plans.

“We’re doing extremely well and are committed to growing further in the Middle East. We have close to 1,400 restaurants in this region and our goal is to double that in the next five years. This aggressive expansion plan will be supported by our strong business models and franchise partners.”

Surely expanding within the Middle East is unlike opening new chains in the United States?

“Every country has its own peculiarities, but in this region our franchise partners have done a great job of ingraining us into the community, while our local partners understand the region, the different countries, the customers; they adapt to our brand to make it as relevant as it can be. I always say in a global business, show me a good franchise and I’ll show you a good leader.”

While the KFC and Pizza Hut chains are instantly recognisable in the Gulf, as well as the wider world, Yum!’s third brand – Taco Bell – is lesser known. Novak explained how that’s slowly changing.

“A few years ago we made the commitment to take Taco Bell global, so we’re beginning to expand to a number of different countries. We’ve opened one franchise in Kuwait [now a total of three], and one in Saudi Arabia [a total of four]. It will be a slow burner, since we’re still at the embryonic stage, but we’re fully committed and our partners are very excited. We see huge opportunity in this region. Long term we see the brand being the size of Pizza Hut and KFC in the region, but it will take a while. Usually it takes 10 years to get to 100 restaurants on a brand. I think we’re beginning to build that scale.

“What we do with Pizza and KFC is to bring a unique image to a known quantity, whereas with Taco Bell you have a unique brand and an unfamiliar food category (Mexican). So it’s a little bit harder to establish Taco Bell than that KFC or Pizza Hut, but we have no doubt that we’ll be able to do it over the long term. In America, Taco Bell is the second most profitable restaurant brand after McDonalds, so we know it’s a great concept, with a broad appeal. It’s just going to take us time to develop it.”