American Brands Sell China Stakes for Royalties as Yum China Revenue Hits $11.8 Billion
Updated
Updated · Business Model Analyst · Aug 22
American Brands Sell China Stakes for Royalties as Yum China Revenue Hits $11.8 Billion
1 articles · Updated · Business Model Analyst · Aug 22
Summary
American brands are increasingly cutting ownership in China rather than fully exiting, keeping trademarks and royalties while local partners take over stores, staff, inventory and pricing.
Yum! Brands shows the clearest model: it owns no equity in Yum China but collects a 3% perpetual royalty, while Yum China generated $11.8 billion of 2025 revenue versus Yum!’s $8.21 billion worldwide.
Starbucks and McDonald’s sit in the middle ground. Starbucks sold about 60% of its China business in April, causing reported China revenue to drop roughly 93% even as 7,991 stores stayed open; McDonald’s holds 48% after its earlier sell-down.
Nike, Estée Lauder and P&G still consolidate China results, so weakening demand and local competition hit reported revenue directly; Nike’s Greater China sales fell to $5.85 billion in fiscal 2026 from $7.55 billion in 2024.
The shift reduces capital and operating risk more than it fixes brand weakness: GM struggled despite a long-standing local partner, while Ralph Lauren and Lululemon are still growing in China without giving up control.