LOUISVILLE, Ky. (WDRB) --  Some companies are raising wages. Others are paying bonuses or investing in technology.

But Louisville-based Yum! Brands, the corporate parent of fast food brands KFC, Pizza Hut and Taco Bell, has no business use for the money it will save under the GOP-led Tax Cuts and Jobs Act.

Instead of using the savings to grow its brands, Yum simply plans to send any tax windfall straight to its stockholders.  

“We are in the process of transforming Yum into a free-cash-flow machine, so we don’t have any needs on cash that we haven’t been able to meet with our own cash generated,” David Gibbs, Yum’s chief financial officer, said Thursday on the company’s quarterly earnings call. “So … the plan is to return the incremental cash from tax reform to shareholders.”

Supporters of the tax bill, which sharply cuts the U.S. corporate income tax rate, say the benefits will flow into the economy through increased business investment, including hiring and wage growth.

Americans for Tax Reform maintains a list of 340 companies that have announced raises, bonuses or increases in retirement pay as a result of the legislation.

But Yum may be a rare company whose business strategy isn’t much furthered by a windfall of cash.

As part of a plan announced in 2016, Yum has been selling off its corporately owned restaurants as it seeks to become a “leaner, more efficient” company, with its 45,000 worldwide stores almost entirely owned by third-party franchisees.

It’s the franchisees, not the company itself, who control the wages of workers in the vast majority of KFC, Taco Bell and Pizza Hut restaurants.

Sara Senatore, an analyst for Sanford C. Bernstein & Co., said in an email that Yum’s plan to pass tax savings straight to shareholders is “consistent with what we’ve heard from most highly franchised restaurant companies.”

“Because of the asset-light nature of the models, the capital and operating investments are made by their franchisees, who operate the restaurants,” she said. 

Yum’s multi-year plan involves cutting overhead, such as corporate payroll, to a smaller share of worldwide restaurant sales. Since 2016, Yum has spent $90 million on “strategic transformation” costs such as severance and early retirement buyouts, according to figures released Thursday.   

Meanwhile, Yum’s cash has grown, absent the tax legislation, as the company sells off restaurants. Last year it sold 1,470 restaurants to franchisees for $1.8 billion in pretax proceeds. By the end of the year, Yum plans for at least 98 percent of its restaurants to be owned by franchisees, up from 97 percent currently.

Yum’s cash on hand has doubled in the last year, to $1.5 billion as of Dec. 31.

Unlike many public companies reporting earnings in recent weeks, Yum has not said how much money it projects to save from the tax overhaul.

While the company will “take advantage” of the lower corporate income tax rate, the savings will be “somewhat muted” by a different provision of the tax bill limiting deductions on business interest, Yum CEO Greg Creed said on Thursday’s call.

Yum is on track to return $6.5 billion to $7 billion to its shareholders from 2017-2019 through stock buybacks and dividends, executives said Thursday.  

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2018 WDRB News. All rights reserved.