Tibet to get first KFC next year, amid China expansion

A customer outside a KFC restaurant in Shanghai, China, on Oct 9, 2015.
A customer outside a KFC restaurant in Shanghai, China, on Oct 9, 2015. PHOTO: REUTERS

DALLAS (REUTERS) - KFC is expected to open its first restaurant in Tibet next year, as parent Yum Brands Inc looks to expand in the Chinese market and shake off a series of food scares and marketing blunders that have severely dented its sales in the country.

A franchisee will open the KFC restaurant, known for its American-style fried chicken, in the Tibetan capital, Lhasa, in the first half of 2016, Yum said in a statement.

The move comes as the owner of the KFC, Pizza Hut and Taco Bell brands prepares to spin off its business in China.

The China unit aims to roughly triple its restaurant count to 20,000 and bring in more franchise partners.

KFC pulled plans to set up shop in Tibet more than a decade ago, saying in 2004 it was not "economically feasible" to enter the region.

The Dalai Lama, Tibet's exiled spiritual leader and a staunch vegetarian, opposed Yum's plans at the time.

As China's economy stutters, Yum's 6,900 China restaurants face the challenge of luring diners who increasingly are looking for healthier, local options and going online to hunt for deals.

Yum executives are hosting an investor meeting in Dallas on Thursday (Dec 10), where they are expected to unveil more details about the China spin-off planned for late 2016.