TRICON GLOBAL RESTAURANTS Louisville, Ky. Financial Plan Is Solid, So Focus Is On Service.(THE NEW AMERICA)

Byline: MARILYN ALVA

It's been more than four years since Tricon Global Restaurants was spun off from PepsiCo Inc. as a separate company.

In that time, a restructuring program made Tricon's earnings and margins more than double. Overhead declined by more than $100 million. Debt was pared down, too.

But Tricon's customer satisfaction levels still rank in the mid- to low tier on such things as quality, cleanliness and customer experience.

Store sales are also a weak point. At more than 30,000 units, Tricon's KFC, Taco Bell and Pizza Hut brands surpass McDonald's in total stores worldwide. But its average unit sales lag the $1.7 million of McDonald's by 50% to 60%.

"They've come a long way," said Mitchell Speiser, analyst with Lehman Bros. "Now they have to drive sales and earnings the old-fashioned way: building same-store sales, opening up stores and not driving earnings just through restructuring benefits."

Lackluster operations at Taco Bell and KFC have recently improved under new presidents. On the other hand, sales at Pizza Hut, Tricon's best performer in recent years, have slowed lately .