dp.cx blog

Last month, Yum Brands announced that it's selling Pizza Hut to LongRange Capital, a private equity firm, for $2.7 billion. The deal splits the brand in two - LongRange gets everything outside mainland China for about $1.5 billion, and Yum China picks up the rest.

I've been thinking about this a lot since.

I started at Tricon Global Restaurants in May 1998. It was my first real job - the kind where you have a badge and a desk and people expect you to show up at a specific time. I was hired to monitor two giant IBM mainframe printers. That was the whole job. Watch the printers, make sure they kept printing.

From there I moved to a group that documented and stored receipt packets for every Pizza Hut restaurant in the country. Every single one. It was the kind of work that sounds tedious when you describe it, and it was, but it was also the first time I understood what it meant to be responsible for something that mattered to the business.

Eventually I landed on the web team, where I wrote a tool called the Taste Panel in ASP Classic. It was an internal application - I honestly have no idea if it's still running somewhere 25+ years later, but stranger things have happened with legacy software. That project was where I really started to learn how to program. Not in the academic sense, but in the practical, someone-is-going-to-use-this-tomorrow sense.

I was there for almost seven years, from May 1998 to March 2005. It's still my longest stint at any employer, even 20 years later. I was never converted to a full-time employee despite years of trying. As I was leaving, my director told me "if you ever want a job, just let me know." After years of trying to become an FTE, that line landed exactly the way you'd expect. I've written before about knowing when it's time to move on - that was a lesson I started learning at Tricon.

I did a lot of growing up there. Tricon became Yum Brands while I was there. I watched the company evolve from the inside. And now it's being sold off to private equity.

Private equity has a well-documented playbook at this point. Buy the brand, load it with debt, cut costs until the product is unrecognizable, extract whatever value is left, and walk away. We've watched it happen with Toys R Us, Red Lobster, Bed Bath & Beyond, and dozens of others. LongRange Capital may break the pattern, but the pattern exists for a reason - it's profitable for everyone except the employees, the franchisees, and the customers.

Pizza Hut hasn't exactly been thriving. But there's a difference between a company working through its own problems and a company being acquired by people whose business model is extraction. One of those has a chance of coming out the other side; the other has a timeline.

I don't have any illusions about corporate loyalty. Tricon didn't owe me anything, and Yum Brands certainly doesn't owe Pizza Hut a forever home. But it's hard to watch the place where you figured out what you wanted to do with your life get handed to a firm that's going to strip it for parts.