The recent CCTV expose on KFC China can be viewed as one of these factors.
The KFC China example reflects a common midlife fatigue that many other multinationals will inevitably experience in China after the initial honeymooning period is over.
Much like the over-expansion of government-led infrastructure projects, KFC China will experience diminishing returns if it continues to expand into areas with lower spending power.
Although unlikely just yet, this may become one of few options left if Chinese media chatters gain further traction and KFC China sees worse-than-expected same store sales decline.
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Brands, Inc. (parent company of KFC, Pizza Hut and Taco Bell) entered China with KFC in 1987.
China KFC supplier in Dachan (Asia) climbed 3.8% in Hong Kong on Friday, and KFC parent Yum!
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"We are steadfast in our belief that the power and popularity of the KFC brand in China will ultimately drive a full sales recovery, " said Mr Novak.
"As a result of adverse publicity from the poultry supply situation in mid-December, China KFC sales experienced a sharp decline, " David Novak, chief executive of Yum said in a statement.
"At one time no one in China knew KFC or McDonald's, but now everyone does, " he says.
Yum Brands rallied on increased demand from China, where its KFC stores are immensely popular.
The company said earlier this month KFC same-store sales in China fell by 16% at a time when nervous consumers have shunned chicken, despite government advice that cooked meat is safe.
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McDonald's is cutting some fat, while KFC opens the first drive-through in China.
In another example, KFC derives almost a third of its total company revenues from China through its 2000 outlets across the country.
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February same store sales actually inched up 2% in China, on the back of flat numbers at KFC and a 13% surge in Pizza Hut, as Chinese consumers ramped up purchases around the Lunar New Year.
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The KFC and Taco Bell parent, which has a major presence in China, is due to report earnings after the closing bell.
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Yum, operator of Taco Bell, Pizza Hut and KFC restaurant chains, forecast a 4% fall in fourth-quarter China same-store sales, an effective measure of financial health, as well as popularity, because it strips away volatile results from newly opened or closed locations.
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He cites in particular Yum Brands, which owns KFC and derives 44 percent of its revenue and 50 percent of its gross profits from China.
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