Yum Brands, the owner of Pizza Hut and KFC, has splashed out $200m (£145m) for a 3% stake in online and mobile delivery firm Grubhub in a deal designed at driving more profitable growth for franchisees.
The transaction values GrubHub, which is predominantly based in the US but has an office in London, at around $6.7 billion (£4.8 billion) and will give it additional liquidity to accelerate expansion of its US delivery network and drive more orders to Yum restaurants.
Yum said the deal provides a “strategic global growth opportunity” for both businesses as the delivery landscape shifts. It also wants to make its brands easier for consumers to access.
Grubhub will be Yum’s only national partner in the US providing dedicated support for KFC and Taco Bell branded online delivery channels, along with access to Grubhub’s online ordering platform, logistics and last-mile support for delivery orders, and point-of-sale integration to streamline operations.
KFC, Taco Bell and Grubhub will engage in joint marketing initiatives that will generate new diners and drive order frequency for existing diners, Yum said.
“We are committed to making our iconic brands easier to access through online ordering for pickup and delivery, and aggressively pursuing delivery as a strategic global growth opportunity, with nearly half of our 45,000 restaurants already offering it today,” said Greg Creed, CEO of Yum Brands.
“We’re pleased to secure this partnership with Grubhub in order to drive incremental, profitable growth for our US franchisees over the long term. Our partnership and strategic investment in Grubhub demonstrate our laser-like focus on two of our growth drivers: distinctive, relevant and easy brands and unmatched franchise operating capability.”
KFC, Taco Bell and Grubhub will work with franchisees to test and roll out online ordering for pickup and delivery to thousands of participating KFC and Taco Bell restaurants in the US markets Grubhub serves.
Additionally, as a part of the partnership, Grubhub will expand its board of directors from nine to 10 members and appoint Pizza Hut US President Artie Starrs to the newly created board seat as an independent director.
Yum Brands operates 44,000 restaurants in more than 135 countries and territories. Grubhub works with approximately 80,000 restaurant partners in 1,600 US cities and London.