Supplier Approval
Yum China has established a rigorous supplier admission mechanism that encompasses risk assessment, qualification review, and factory audit. In addition, we require all new suppliers to complete training on the Yum China Quality Management Institute e-learning platform on our audit standards and pass the required assessments before entering our admission process.

Supplier Management

Standards： We continue to advance the development of suppliers' food safety systems and capabilities, recognizing food safety certifications endorsed by the Global Food Safety Initiative (GFSI), such as BRCGS and FSSC 22000, which are considered equivalent recognition by Yum China's food safety audits.
Training: We held annual STAR training for all food suppliers to keep them up to date about Yum China's latest requirements on food quality.
Audits: We carry out STAR audits to verify whether the suppliers' food safety and quality management systems meet our requirements.
Sampling Tests: Yum China develops an annual raw material food safety sampling plan and conducts random tests to ensure compliance with relevant standards.
Performance Evaluation: Yum China has established a comprehensive supplier performance evaluation system that assesses food safety and quality performance quarterly. Based on the evaluation results, we graded the suppliers, formulate targeted improvement measures, and promote supplier optimization and improvement.
In 2024: over 80% of our food ingredient and food-contact packaging suppliers obtained GFSI-benchmarked food safety certifications. Yum China conducted more than 300 food safety and quality audits on supplier and over 3,300 sampling tests for raw material food safety and quality.

Yum China operates a tailor-made, world-class logistics management system to secure food safety and provide efficient and reliable logistics services for our restaurants. We also conduct regular audits and routine inspections on our logistics service providers (including warehouse, transportation, and unloading of goods) to verify that their food safety and quality management systems meet our requirements.

Furthermore, we utilize the latest technologies to monitor the food safety of cold chain logistics and warehousing processes. We have implemented a smart IoT platform to monitor the movement of food ingredients from suppliers to logistics centers and then to restaurants. This platform also tracks the real-time temperature of vehicles, cold storages, and refrigerated warehouses, as well as the products' temperature from logistics centers to the restaurants, enabling us to promptly identify potential food safety risks. We continue to invest in the supply chain infrastructure to widen our strategic moat and strengthen business flexibility and resilience. This allows us to maintain high synergy and sustainability in special circumstances, reducing the adverse effects of supply disruptions such as the COVID-19 pandemic. Through cooperation with suppliers, as well as a vast logistics network, we can continuously supply all food products without significant interruption.

By the end of 2024, our network comprised utilized 33 logistics centers to which distribute goods to our company-owned stores and franchise stores.In 2024, we conducted over 170 food safety and quality audits with warehousing and transportation service providers.

Audits and Inspections：
FSQNR Team conducts regular unannounced Operational Excellence Compliance (OEC) Audits on all restaurants, covering food safety, product quality, and customer service to ensure full compliance with established food quality and safety standards at every stage before the food is served to our customers. We also conduct regular quality assessments of microbiological sampling and testing of food utensils, tableware, water, ice, and related products to help ensure compliance.

Restaurant Operations Management:
Yum China has established industry-leading restaurant operating standards and procedures covering raw material receiving, storage, thawing and cooking, shelf-life management, personal hygiene, and utensil and equipment cleaning and disinfection. These help ensure that all our restaurants implement consistent food safety standards and provide food with consistent quality and taste. We conduct annual risk assessments at our restaurants to identify potential food safety and quality risks and take effective measures to mitigate risks and eliminate hazards. We also conduct risk assessments for new products, new restaurant layouts, equipment, and store operations to help ensure compliance with food safety and quality requirements.

Delivery Management:
We have established industry-leading operation standards and protocols, requiring all third-party delivery partners to sign and strictly adhere to a letter of commitment on the food safety and quality practices for food delivery. The letter outlines specific requirements for regulatory compliance, staff management, catering, delivery facilities, equipment as well as rigorous management of third-party platforms, to ensure the implementation of food safety operation procedures.

In 2024, OEC audit coverage for restaurants nationwide was 100%. We conducted over 10,000 product quality assessments for about 600 new or upgraded menu items.