CEO training ground for the restaurant industry

Looking for the next CEO for your restaurant chain? Try mining the ranks at Yum Brands.

The restaurant conglomerate, which owns Pizza Hut, KFC and Taco Bell and reported quarterly results Tuesday, has supplied rival eateries with CEOs for decades. Between its globally recognized chains, massive international footprint and company culture, Yum has quietly become an incubator for future industry leaders.

“They have such a strong focus on leadership development, and in the past couple of decades, they have had very, very strong CEOs who have led very much ‘people first’ or ‘culture first,'” said Sarah Lockyer, chief brand officer of The Elliot Group, an executive search firm.

Yum’s status as a CEO training ground can trace back to its days as part of PepsiCo, which is also known for its talent development. The food and beverage giant owned KFC, Pizza Hut and Taco Bell before spinning off the business as Tricon Global Restaurants in 1997. Five years later, the company was renamed Yum.

“Our commitment to unrivaled culture and talent enables our leaders to drive impact across our global business,” a Yum spoksperson said in a statement to CNBC. “As the largest restaurant company in the world, we’re proud that many industry leaders have roots at Yum!, and our strength is in how we continue to grow and elevate exceptional talent within our own organization.”

Lockyer pointed to past Yum CEOs like David Novak and Greg Creed, who she said gave other executives at the company the chance to shine and opportunities to grow their confidence and their resumes.

Take Starbucks CEO Brian Niccol. After starting his career at Procter & Gamble, he joined Yum in late 2005, when Novak led the company. Niccol had a stint as chief marketing officer of Pizza Hut before moving over to Taco Bell, where he introduced the chain’s Live Mas tagline and Doritos Loco Tacos.

When Creed transitioned from Taco Bell CEO to chief executive of Yum, Niccol took over his vacated role as head of the Mexican-inspired chain. Niccol left in 2018 to lead a turnaround at Chipotle, where he stayed for more than six years before Starbucks lured him away for another fix-up job.

While the coffee giant is still reporting same-store sales declines, Niccol said during the company’s earnings conference call last week that the comeback is ahead of schedule.

Another much-lauded restaurant CEO with Yum connections is Kevin Hochman, who currently leads Brinker International. He joined Yum in 2014 as chief marketing officer of KFC and eventually rose to lead the U.S. businesses of both the fried chicken chain and Pizza Hut. He left Yum in 2022 to revive Brinker, which owns Chili’s and Maggiano’s Little Italy.

Under Hochman’s leadership, Chili’s has become the rare restaurant chain reporting double-digit same-store sales growth for multiple quarters. Savvy value-focused advertising and the viral Triple Dippers appetizer offering have helped the once-sleepy chain become a dining destination yet again. Since Hochman took the reins of Brinker, the stock has more than quintupled in value.

Like Niccol, Hochman also began his career at P&G, which has also long been known for its corporate leadership training.

For some Yum alumni, the internal competition for the top job means that they have to leave to take the next step in their careers. With three global restaurant chains under the broader Yum umbrella, the race to the top can be stiff.

“These companies have so much high-performing talent because they’re so large, there’s so many divisions, but there can only be one CEO of Yum Brands,” Lockyer said.

That’s also true for its brands, which can have marketing, operations, domestic and international executives all competing for the top spot.

Julie Felss Masino joined Yum as president of Taco Bell North America in 2018, following roles at Starbucks, Sprinkle Cupcakes and Mattel. Two years later, she became head of Taco Bell’s growing international business. Although she was positioned as a potential candidate to lead Taco Bell as CEO, she left the chain in June 2023, the same month that Taco Bell’s then-CEO Mark King announced his intent to retire and Yum tapped Sean Tresvant to succeed him. Two months later, Cracker Barrel announced Masino as its latest CEO.

More recently, Dave & Buster’s tapped Tarun Lal last month to lead the company after a months-long search that began even before his predecessor departed in December. The restaurant and arcade chain has seen its sales slide in recent months as low-income consumers spend less on dining out. Lal previously served as president of KFC U.S., which has had its own struggles winning over diners in recent months.

When Dave & Buster’s announced Lal as its pick, BMO Capital Markets analyst Andrew Strelzik wrote in a note to clients that he was “surprised” the chain went for a restaurant operator over an amusement-industry veteran. But Lal’s resume — including more than two decades of experience across Yum’s international business — likely won over the board.

“Given execution issues the board has cited from prior CEO, it likely was looking for more of an operations background. Lal has run the ~4,000-unit KFC U.S. since 2022 and previously oversaw ~20,000 global units as KFC COO,” Strelzik said.

Yum veterans aren’t found only in the restaurant industry. Harley-Davidson on Monday announced Artie Starrs as the motorcycle company’s latest CEO.

Starrs is departing his role as chief executive of “eatertainment” chain Topgolf to take the new job. Prior to Topgolf, he served as Pizza Hut Global CEO.

Yum is also undergoing its own CEO transition. In October, CFO Chris Turner will take the reins from David Gibbs, who plans to retire after 37 years with the company. The hand-off could mean a bigger shakeup ahead for Yum’s executive ranks if other top executives like Chief Operating Officer Tracy Skeans, for example, decide to look externally for their next moves.