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Revenue Recognition Accounting Policy | 3 Months Ended
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Mar. 31, 2025
Revenue Recognition and Deferred Revenue [Abstract] |
Revenue Recognition | Revenue Recognition Disaggregation of Total Revenues The following tables disaggregate revenue by Concept, for our two most significant markets based on Operating Profit and for all other markets. We believe this disaggregation best reflects the extent to which the nature, amount, timing and uncertainty of our revenues and cash flows are impacted by economic factors.
| Quarter ended 3/31/2025 |
|  | KFC Division |  | Taco Bell Division |  | Pizza Hut Division |  | Habit Burger & Grill Division |  | Total |
U.S. |  |  |  |  |  |  |  |  |  |  |
Company sales |  | $ | 23 |  |  | $ | 261 |  |  | $ | 3 |  |  | $ | 125 |  |  | $ | 412 |  |
Franchise revenues |  | 42 |  |  | 211 |  |  | 63 |  |  | 2 |  |  | 318 |  |
Property revenues |  | 3 |  |  | 9 |  |  | 1 |  |  | 1 |  |  | 14 |  |
Franchise contributions for advertising and other services |  | 9 |  |  | 157 |  |  | 69 |  |  | 1 |  |  | 236 |  |
China |  |  |  |  |  |  |  |  |  |  |
Franchise revenues |  | 69 |  |  | — |  |  | 17 |  |  | — |  |  | 86 |  |
Other |  |  |  |  |  |  |  |  |  |  |
Company sales |  | 193 |  |  | 2 |  |  | — |  |  | — |  |  | 195 |  |
Franchise revenues |  | 283 |  |  | 14 |  |  | 61 |  |  | — |  |  | 358 |  |
Property revenues |  | 10 |  |  | — |  |  | — |  |  | — |  |  | 10 |  |
Franchise contributions for advertising and other services |  | 140 |  |  | 3 |  |  | 16 |  |  | — |  |  | 159 |  |
|  | $ | 773 |  |  | $ | 657 |  |  | $ | 231 |  |  | $ | 128 |  |  | $ | 1,788 |  | (a)
(a) Does not include a charge of $1 million to Unallocated Franchise revenues during the quarter ended March 31, 2025.
|  | Quarter ended 3/31/2024
|  | KFC Division |  | Taco Bell Division |  | Pizza Hut Division |  | Habit Burger & Grill Division |  | Total
U.S. |  |  |  |  |  |  |  |  |  |
Company sales |  | $ | 14 |  |  | $ | 240 |  |  | $ | 2 |  |  | $ | 127 |  |  | $ | 383 |
Franchise revenues |  | 43 |  |  | 188 |  |  | 68 |  |  | 1 |  |  | 300 |
Property revenues |  | 3 |  |  | 9 |  |  | 1 |  |  | 1 |  |  | 14 |
Franchise contributions for advertising and other services |  | 10 |  |  | 146 |  |  | 73 |  |  | 1 |  |  | 230 |
China |  |  |  |  |  |  |  |  |  |
Franchise revenues |  | 68 |  |  | — |  |  | 17 |  |  | — |  |  | 85 |
Other |  |  |  |  |  |  |  |  |  |
Company sales |  | 91 |  |  | — |  |  | — |  |  | — |  |  | 91 |
Franchise revenues |  | 272 |  |  | 13 |  |  | 62 |  |  | — |  |  | 347 |
Property revenues |  | 11 |  |  | — |  |  | — |  |  | — |  |  | 11 |
Franchise contributions for advertising and other services |  | 120 |  |  | 2 |  |  | 15 |  |  | — |  |  | 137 |
|  | $ | 632 |  |  | $ | 598 |  |  | $ | 238 |  |  | $ | 130 |  |  | $ | 1,598 |
Contract Liabilities Our contract liabilities are comprised of unamortized upfront fees received from franchisees and are presented within Accounts payable and other current liabilities and Other liabilities and deferred credits in our Condensed Consolidated Balance Sheets. A summary of significant changes to the contract liability balance during 2025 is presented below.
|  | Deferred Franchise Fees
Balance at December 31, 2024 |  | $ | 438 |
Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period |  | (20) |
Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period |  | 22 |
Other(a) |  | 2 |
Balance at March 31, 2025 |  | $ | 442 |
(a) Primarily includes the impact of foreign currency translation. We expect to recognize contract liabilities as revenue over the remaining term of the associated franchise agreement as follows:
Less than 1 year | $ | 70 |  |
1 - 2 years | 66 |  |
2 - 3 years | 59 |  |
3 - 4 years | 51 |  |
4 - 5 years | 44 |  |
Thereafter | 151 |  |
Total | $ | 442 |  |

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