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Yum! anticipates $20M+ impact from health care reform in 2014
April 15, 2010
Yum! Brands is anticipating the U.S. health care reform act will lead to a $20 million to $30 million impact on the company in 2014, David Novak, Yum! chairman, president and CEO told investors on the company's earnings call Thursday.
The company is in the midst of refranchising Pizza Hut and recently launched its KFC efforts, with the goal of moving from 20 percent ownership to 5 percent. The estimated impact was based on the company's anticipated work force structure.
Franchisees also will be impacted, with costs expected to be $10,000 to $15,000 per store, Novak said, something franchisees purchasing stores should understand. "And we are going to work with them to mitigate the cost," he said.
Novak said the company has time to deal with the future impact, which could change as the legislation continues to be ironed out.
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