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Description of the Business
8 Months Ended
Aug. 31, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Description of the Business

Note 1 – Description of the Business

Yum China Holdings, Inc. (the “Company”) owns, franchises or has ownership in entities that own and operate restaurants under the KFC, Pizza Hut Casual Dining, Pizza Hut Home Service, East Dawning and Little Sheep concepts (collectively, the “Concepts”). The Company was incorporated in Delaware on April 1, 2016. The Company separated from Yum! Brands, Inc. (“YUM” or the “Parent”) on October 31, 2016, becoming an independent publicly traded company as a result of a pro rata distribution to shareholders of YUM. YUM’s Board of Directors approved the distribution of its shares of the Company on September 23, 2016 and the Company’s Registration Statement was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on October 7, 2016. On October 31, 2016, YUM’s shareholders of record as of October 19, 2016 received one share of the Company’s common stock for every one share of YUM’s common stock held as of the record date. The Company began trading “regular way” under the ticker symbol “YUMC” on the New York Stock Exchange on November 1, 2016. References to the Company throughout these Condensed Combined Financial Statements are made using the first person notations of “we,” “us” or “our.”

In connection with the separation of the Company from YUM, Yum! Restaurants Asia Pte. Ltd., a wholly-owned indirect subsidiary of YUM, and Yum Restaurants Consulting (Shanghai) Company Limited (“YCCL”), a wholly-owned indirect subsidiary of the Company, entered into a 50-year master license agreement with automatic renewals for additional consecutive renewal terms of 50 years each, subject only to YCCL being in “good standing” and unless YCCL gives notice of its intent not to renew, for the exclusive right to use and sublicense the use of intellectual property owned by YUM and its subsidiaries for the development and operation of the KFC, Pizza Hut Casual Dining and Pizza Hut Home Services brands and their related marks and other intellectual property rights for restaurant services in the People’s Republic of China (the “PRC” or “China”). In addition, subject to certain agreed-upon milestones, the Company has an exclusive license under the master license agreement to operate and develop Taco Bell restaurants and use the related marks in the PRC. In exchange, we pay a license fee to YUM equal to 3% of net sales from both our Company and franchise restaurants. We own the East Dawning and Little Sheep intellectual property and pay no license fee related to these concepts.

The operations of each Concept represent an operating segment of the Company within these Condensed Combined Financial Statements. We have two reportable segments: KFC and Pizza Hut Casual Dining. Our remaining operating segments, including the operations of Pizza Hut Home Service, East Dawning and Little Sheep, are combined and referred to as All Other Segments, as those operating segments are insignificant both individually and in the aggregate.