Tim Ashby: Yum! Brands

Yum! Brands’ regional counsel Tim Ashby has the Far East in his sights. He talks China and chicken with Jon Parker

Tim Ashby is a surprisingly athletic-looking chap, given his access to more than 2,000 places to pick up some pizza or fried chicken.

And as regional counsel of the international arm of Yum! Brands, the global fast food empire behind not only Pizza Hut and Kentucky Fried Chicken (KFC), but the Taco Bell and Long John Silver US restaurant chains, he has a lot on his plate.

Ashby is responsible for the legal work for Yum!’s 1,000-odd company-owned restaurants in the UK, France, Germany and the Netherlands, as well as for its 700 European franchises spread from Iceland to Israel. And he does it all with just three lawyers to help him.

“It’s a perpetual challenge to see how small we can make the team,” he says.

And on the basis that prevention is better than cure, he adds, education is the key to keeping it that way. “We spend a lot of time coaching people and a lot of time teaching our businesspeople how to avoid problems,” he explains. “We teach so as not to do.”

Yum! is headquartered in Louisville, Kentucky, and has a team of 25 fee-earners overseeing the US operation. In Europe, lawyers Ray Weston, an American, and Steve Jackson, a Brit, help Ashby hold the fort at the international division’s HQ in Woking, Surrey, while Spaniard Diego De Blas Bravo helps looks after the Continental franchises from Geneva.

Ashby himself came to Yum! from PepsiCo, which he joined in 1993 as international counsel. PepsiCo acquired the KFC, Pizza Hut, Taco Bell and other brands in the late 1970s and early 1980s and combined them under the name PepsiCo Restaurants. When it spun the business off as Tricon Global in 1997, Ashby went with it, and in 2002 Tricon changed its name to Yum! Brands.

Prior to that he spent five years in the commercial team at the pre-merger Denton Hall, where he was a trainee.

Franchises are at the core of the Yum! business model, and Ashby explains that, just as with internal contacts, educating franchisees is the key to keeping the legal spend minimal.

“I refuse to accept the word ‘legalese’,” he says. “If anyone is negotiating a deal or agreement then they need to be able to understand what it says. If they can do that, then the chances are they won’t commit any serious mistakes.”

Ashby characterises the no-nonsense approach as no more than “the application of common sense”, and stresses the importance of “dealing with the stuff that really matters”.

For this reason he is sceptical of external legal advisers for being unable to get down to the basics and spends just £1m a year externally, most of it on lease work and employment.

That said, Ashby admits he has had good experience of using Linklaters for advice on Spain and Russia (through partners Alvaro Sainz and Dominic Sanders respectively). He has also used Freshfields Bruckhaus Deringer for transactions in Germany and trademark work and Macfarlanes for UK employment and commercial.

Linklaters was also involved in Yum!’s biggest deal of recent years, its £99m acquisition of Whitbread’s 50 per cent stake in Pizza Hut UK, which closed this month.

Partner Jeremy Parr led the Linklaters team acting for Yum!, while Slaughter and May acted for Whitbread, led by partner Martin Johnson.

Ashby says the deal was an amicable and straightforward one (“after 20 years of joint ownership, there’s very little due diligence to be done”), Whitbread had been “very good joint venture partners”, and Whitbread’s departure reflects no more than its “asset migration” into hotels and leisure.

Having consolidated its UK operation, Yum!’s next move is to up its presence on the Continent, Ashby says, and aims to rival the 5,000 to 6,000-outlet saturation already achieved by McDonald’s. And just like for everyone else, China is on the horizon.

Yum! opened its first restaurant in China in 1989, but waited 10 years before the consumer dynamics allowed the move to start really paying off. Since then the chain has expanded to more than 1,800 outlets, most of them company-owned, and the majority of which are KFC. (Pizza has yet to catch on with the Chinese, while fried chicken is as old as Confucius.)

Under pressure, Ashby admits he has Chinese tastes himself.

“Personally I prefer chicken to pizza,” he says guiltily, “but I hope that doesn’t alienate me from half our workforce.”

Tim Ashby
Regional counsel
Yum! Brands (International Region)

Organisation: Yum! Brands (International Region)
Sector: Restaurants
Turnover: International (non-US) – $3.3bn (£1.76bn) (including franchisees);
total – $9.5bn (£5.05bn)
Legal spend: £1m outside US
Employees: 280,000
Legal capability: Four
Regional counsel: Tim Ashby
Reporting to: Senior vice-president and general counsel Jim Elgass
Main law firms: Denton Wilde Sapte, Freshfields Bruckhaus Deringer, Linklaters, Macfarlanes, Collins Dryland & Thorowgood, McClure Naismith
Tim Ashby’s CV: Education: 1981-84 – Law, Oxford University;
1985 – College of Law
Career: 1986 – trainee/assistant, Denton Hall, London; 1993 – PepsiCo, Surrey;
1998 – Regional Counsel, Yum! Brands