Yum Brands Inc. is investing $200 million in Grubhub Inc. in a deal that will allow KFC and Taco Bell to expand delivery.
Louisville-based Yum, which owns the KFC and Taco Bell brands, agreed to buy $200 million of common stock in Chicago-based Grubhub (NYSE: GRUB).
Yum said in a news release that the increased liquidity will allow Grubhub to accelerate expansion of its U.S. delivery network, drive more orders to Yum restaurants, and "enhance the ordering and delivery experience for diners, restaurants and drivers."
Grubhub will be Yum's only national partner providing dedicated support for KFC and Taco Bell branded online delivery channels, according to the release. The deal will provide Yum access to Grubhub’s online ordering platform, logistics and last-mile support for delivery orders, and point-of-sale integration to streamline operations.
KFC, Taco Bell and Grubhub will engage in joint marketing initiatives aimed at generating new customers and driving order frequency for current customers.
"We are committed to making our iconic brands easier to access through online ordering for pickup and delivery, and aggressively pursuing delivery as a strategic global growth opportunity, with nearly half of our 45,000 restaurants already offering it today," Yum CEO Greg Creed said in the release.
The companies didn't disclose the start date for the Grubhub partnership wasn't disclosed, other than to say the initial phase will be launched in the coming months.
Also as part of the partnership, Pizza Hut U.S. President Artie Starrs will join the Grub Hub board.
Pizza Hut is another Yum brand, and it will work with Grubhub to determine how best to leverage the companies' respective scale and expertise, according to the release.
