Bad publicity lingering from an e coli scare involving Taco Bell lettuce in late 2006 was even more to blame, says Yum officials, and the chain's image was further dunned in February when a KFC in New York City became overrun by rats during a construction project. That problem led to "much adverse publicity," Novak says, trouble enhanced via Internet exposure and other media attention.

In response, Yum is working with agricultural suppliers to improve the vegetable vetting process, is cooperating with public health agencies, and even hired pest control expert Bobby Corrigan to offer further advice on the NYC pest problem. "We expect to review these recommendations by mid-May," says Novak. "We are determined to prevent this incident from happening again."

Strong brand recognition and market penetration should allow Taco Bell and KFC to recover from the recent controversies, company officials maintain, adding they expect to ride the international train to great lengths in 2007. Should the firm eclipse the 1,000-unit mark in opening stores overseas again, it would be the seventh straight year Yum has reached that level.

With more than 34,000 units overall, nearly all of which are franchised, Yum has advanced into mainland China quicker than other Asian markets, and is now operating more than 4,000 KFC's or Pizza Huts in the country. Yum's Dallas-based international group, YRI, opened 144 more KFC's and Pizza Huts globally during the first quarter, and Novak says that pace will accelerate for the remainder of the year.

Figures for domestic expansion were not provided, but Yum Brands did sell 105 company owned units to franchisees in the first quarter. The transfers are part of a three-year program through next year to sell 1,500 company restaurants to franchisees. Some 557 have changed over since the beginning of 2006, and fulfilling the campaign would increase US franchise ownership to 83% of the system, up from 77% at the outset.