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Yum Brands CEO: About half US population eats Taco Bell every month

Yum Brands CEO Greg Creed, who ran Taco Bell for eight years, told CNBC on Wednesday that the Tex-Mex food chain remains a bright spot for the restaurant giant, but Pizza Hut needs to do a lot of work.

"Taco Bell is doing well. We had a great quarter ... [and] five years of really good same store sales growth," Creed said on "Squawk Box," a day after a series of investor day announcements, including a goal of being 98 percent franchised by the end of 2018.

Taco Bell has no plans to change to be more like Chipotle, Creed said. "They're very different brands," he explained, adding Taco Bell has not necessarily benefited from the food safety scares at Chipotle.

"We're going to do almost $10 billion in sales at Taco Bell in the U.S.," Creed said. "Half the U.S. population eats Taco Bell once a month. The average people comes every 11 days." The population of the United States is nearly 320 million

"Breakfast has been a really big win for us [at Taco Bell]," Creed said. "We had 14 percent transaction growth in breakfast in the last quarter."

At Yum, which also owns KFC, Pizza Hut needs a major overhaul. "Of the three brands, it's the one we've got the most to do," Creed said.

"We've got to make [Pizza Hut] more relevant and distinctive," he added, stressing the importance of putting in place tech improvements to make it easier to get pizzas to consumers. "People want easier and better."

Rival Domino's Pizza has done a much "better job of technology and we need to catch up," he said. "[But] we are still the global leader in pizza. We have 16,000 restaurants and $12 billion in sales."

"The proof is, we turned around our KFC U.S. business, which two years ago everyone had written off," Creed said. "We can do the same for Pizza Hut. I think it's a real growth story."

Shares of Yum Brands were up about 20 percent so far this year, as of Tuesday's close.

The strategy behind the Yum China spinoff

Pedestrians walk past a Yum! Brands Inc. KFC restaurant in Shanghai, China, on Wednesday, Oct. 21, 2015.
Qilai Shen | Bloomberg | Getty Images
Pedestrians walk past a Yum! Brands Inc. KFC restaurant in Shanghai, China, on Wednesday, Oct. 21, 2015.

With Yum Brands spinning off its China division at the end of the month, the new company, Yum China, begins trading on the New York Stock Exchange on Nov. 1, under the ticker symbol YUMC.

"The good news is we still got the brands. It's not your typical spinoff. You normally spin off and no longer have a relationship. We're going to get a 3 percent lifetime license fee from China," Creed told CNBC.

The Yum CEO said concern about food safety scares in China was not the driving factor for the split.

"We thought we could create these two powerful independent focused growth companies," he explained. "[We] thought we could have a higher-growth but lower-risk business if we obviously separate the China business out."

Last week, Yum Brands saw poor third-quarter sales in China hit overall earnings and revenue, which were below expectations.

Yum China CEO Micky Pant told CNBC's "Power Lunch" on Tuesday: "It was just one quarter. In the last five quarters, we had four positive quarters."

"If you take the general sweep of things over the last 25 years, Yum China has been one of the most successful companies in China," Pant added.

Creed told CNBC on Wednesday that he expects Yum Brands and Yum China to work closely. "You'll see a lot of our ideas going to China. You'll see us take a lot of ideas out of China to the rest of Yum."

At Tuesday's investor day, Yum Brands also said it plans to expand its share buyback plan to $13.5 billion, including dividends.


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— Reuters contributed to this report.