Yum China Holdings is moving to take full ownership of the Pizza Hut brand on the Chinese mainland in a $1.2 billion deal, a strategic shift that would eliminate ongoing royalty payments to Yum Brands.
The move gives the company direct control of one of its most profitable and fast-growing restaurant businesses.
The transaction is expected to improve store economics and accelerate expansion as Yum China pushes to deepen its dominance in the country’s casual dining market.
Pizza Hut is currently the largest casual dining restaurant brand in China under the Yum China portfolio. In 2025, the business generated $2.3 billion in segment revenue and $183 million in operating profit. In the first quarter of 2026, it posted its 13th consecutive quarter of same-store transaction growth and its eighth straight quarter of margin and operating profit expansion.
Yum China, which operates KFC and Pizza Hut on the Chinese mainland, said it plans to expand the Pizza Hut footprint to more than 6,000 restaurants by 2028, up from 4,375 locations across more than 1,100 cities today.
The company is also targeting a doubling of Pizza Hut operating profit by 2029 in comparison to 2024 levels.
On moving from exclusive licensee to brand owner, Yum China CEO Joey Wat said: “Ownership will give us greater strategic flexibility to drive innovation across menus, formats, and operations.”
The transaction comes as Yum China continues to lean on KFC as its primary growth engine. The company said KFC China, which currently operates about 13,450 restaurants, is expected to expand to more than 17,000 locations by 2028, particularly in lower-tier and underserved markets.
Separately, Yum China said KFC China will be eligible for a decade-long financial incentive from Yum Brands tied to system sales growth targets, aimed at supporting continued expansion momentum.
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