Yum China to buy controlling stake in Chinese-style dining franchise brand to expand biz

Yum China Holdings, Inc. has launched the pilot phase of its new hands-free, AI-enabled assistant called Q-Smart to assist restaurant managers with daily operational tasks. The tool, developed to support frontline managers, integrates with wearable devices such as wireless earphones and smartwatches, enabling voice-interactive functionality for labor scheduling, inventory monitoring, food safety checks, and equipment inspections.

Unlike traditional systems reliant on touchscreens or PCs, Q-Smart operates through natural language interaction, allowing managers to remain hands-free while accessing real-time operational insights. The assistant compares current inventory with projected sales forecasts and sends timely alerts to optimize stock levels. It also supports on-the-spot decision-making by providing immediate responses to voice commands, drawing on Yum China’s internal knowledge base.

The pilot is currently being implemented at select KFC outlets. Yum China plans to incorporate user feedback from the initial phase before expanding the tool across its broader restaurant network.

Leila Zhang, Chief Technology Officer, Yum China said, “Q-Smart is not just an AI tool, it is a potential game-changer for how restaurants can be managed. We believe that Q-Smart will not only help Yum China improve its operational efficiency, but can also serve as an example for the digital transformation and smart development of the catering industry.”

The introduction of Q-Smart marks a continuation of Yum China’s broader digital transformation strategy. Since introducing digital payments in KFC stores in 2015 and launching the KFC Super App in 2016, the company has consistently expanded its technology offerings. As of March 2025, its digital loyalty programs for KFC and Pizza Hut have surpassed 540 million members.

Over the past several years, Yum China has progressively integrated artificial intelligence into its operations. This includes the 2019 introduction of AI-powered scheduling and management tools, the launch of its comprehensive Super Brain decision support system in 2021, and the rollout of handheld Pocket Managers in 2022. In 2023, the company began applying generative AI (AIGC) in logistics, customer service, and other backend processes. By 2024, AIGC became integrated across key business functions.

The Q-Smart platform was introduced at Yum China’s first AI Day event held on June 20, 2025, in Shanghai. The event also included the conclusion of the company’s first All-Staff Hackathon, which began in March 2025 and saw participation from around 200 teams across 30 markets. The initiative encouraged employees to develop tech-driven solutions to operational challenges.

At the event, Yum China CEO Joey Wat announced a 100 million yuan (approximately $13.9 million) Frontline Innovation Fund to enhance technology adoption and support frontline restaurant teams. The fund will also make the Hackathon an annual event going forward.

Wat stated, “Yum China has always believed that true innovation must originate from frontline needs and serve frontline scenarios. AI is not only a technical tool to improve efficiency, but also a core partner to stimulate employee creativity.”

With the introduction of Q-Smart and the continued investment in restaurant-focused AI solutions, Yum China aims to further modernize store-level operations, improve productivity, and enhance the customer experience. The company’s approach places technology at the core of its retail operations, emphasizing not just efficiency, but usability and relevance for frontline staff.

Yum China has announced to promote balanced diets by offering customers more fruit and vegetable options.

The campaign was launched simultaneously on September 13 at over 6,000 KFC, Pizza Hut and Taco Bell stores nationwide, before gradually expanding to more stores.

A core component of the campaign is the "Fruit and Vegetables 100+" program that encourages customers to add at least 100g of fruit and vegetables to their meals.

KFC, Pizza Hut and Taco Bell will also launch a series of new and updated fruit and vegetable based products in China, while leveraging their digital platforms to raise public awareness of nutrition and healthy eating.

As China's largest restaurant company, Yum China is committed to offering a wide variety of delicious and nutritious foods to customers. To achieve this, the Company focuses on food innovation, upgrading product offerings with recipe changes, using creative ingredient combinations, and adopting multiple cooking methods. For example, at KFC, approximately 80% of non-beverage breakfast menu items are made from the oven or other healthy cooking methods.

Yum China regularly reviews its ingredients and through ingredient optimization has reduced the amount of salt, sugar, and oil in its recipes. KFC alone eliminated about 118 tons of salt from its products between 2018 and the end of 2020. In addition, in 2020, Yum China became one of the first restaurant companies to introduce plant-based products to China when it launched plant-based beef burgers and chicken nuggets at KFC, plant-based beef burgers at Pizza Hut and plant-based beef and pork tacos at Taco Bell.

The latest campaign is designed to support recommendations outlined in the National Health Commission's Dietary Guidelines for Chinese Residents that adults require a daily intake of 300-500 grams of vegetables to maintain a balanced diet.

Yum China, the operator of fast-food giants KFC, Pizza Hut and Taco Bell in the country, beat earnings expectations in its first report since spinning off from its US parent.

The firm said operating profit for 2016 hit USD640 billion in China, up 31 percent from 2015 when it was a unit of Yum Brands.

The growth came as Yum added 575 new restaurants over the year -- with more than half coming in the final three months -- bringing its total in the country to more than 7,500.

Micky Pant, CEO, said, "We believe the majority of our restaurants in China are yet to be built. Right now, our top priority is consistently delivering positive same-store sales growth."

Same-store sales expanded three percent at KFC but Pizza Hut's performance fell seven percent, it added.

Nevertheless "this was a momentous year for Yum China," Pant said, adding that the new independent firm has enhanced its leading position in the Chinese market.

After three decades in the country, Yum Brands in October split its USD6.9 billion operations as the fast-food industry faces sluggish sales growth with consumers increasingly turning to up market dining options.

The company's China business was also hammered by a tainted meat scandal in mid-2014.

Three months after the spin-off move, Yum China opened China's first Taco Bell, in Shanghai with a menu adapted to local tastes.