YUMYum! Brands, Inc.

Yum! Brands owns KFC, Taco Bell and Pizza Hut but barely operates restaurants itself — it collects royalties.

The overwhelming majority of outlets belong to franchisees who pay a percentage of sales plus advertising fund contributions. What stays with the company is the brand, the recipes and the standards, while capital spending and operating risk sit with the partner. Hence high margins and cash flow that requires almost no construction outlay.

Growth comes from opening outside the United States, above all in Asia and emerging markets where a fast-food chain still reads as a novelty. Of the three brands Taco Bell is strongest at home and KFC abroad, while the pizza business is squeezed by delivery aggregators. Risks: franchisee solvency and currency rates. Yum pays a dividend and buys back stock.