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KFC, Pizza Hut In Ethiopia? It’s The Right-Sized Market

KFC, Pizza Hut In Ethiopia? It’s The Right-Sized Market

Ethiopia and its 85-million population could be the next African market to get Kentucky Fried Chicken; Pizza Hut may not be far behind.

Africa’s second most-populous country is in the cross hairs of Louisville, Kentucky-based Yum! Brands, owner of the KFC fast-food chain that is expanding across the continent, BusinessWeek reports.

KFC has franchises in 16 African markets. South Africa and Nigeria are the largest in the region. The company is also thinking about opening Pizza Hut stores in the region, said Bruce Layzell, Yum’s general manager of new African markets, in a BusinessWeek phone interview.

Ethiopia stands out for expansion, Layzell said, because its population size makes it attractive. “We’re certainly nowhere near pushing the go button, it’s still at that explore stage, to find the right partner, to see if the business model will work.”

Ethiopia’s economy grew by 7 percent in 2013 and is expected to grow 7.5 percent in 2014, according to the Washington-based lender, International Monetary Fund. From 2008 to 2012, Ethiopia’s economy grew an average of 10.3 percent.

Yum! Brands’ fourth-quarter profit exceeded analysts’ estimates based on international revenue gains, according to BusinessWeek. The company has been expanding in emerging African markets and boosting sales in Russia and France.

Yum has more than 40,000 restaurants worldwide with about a quarter of its revenue earned internationally. International sales at restaurants that have been open at least a year increased by 2 percent in the fourth quarter, BusinessWeek reported.

“We don’t want to go to a country where we can only build four or five restaurants, that’s
going to deliver no one success,” Layzell said. “We want to go in and build 50, 100 — our
business is the scale game.”

Yum does business the following sub-Saharan African countries: Zimbabwe, Zambia, Uganda, Tanzania, Swaziland, South Africa, Nigeria, Namibia, Mozambique, Mauritius, Malawi, Lesotho, Kenya, Ghana, Botswana and Angola.