Yum Brands (NYSE:YUM) announced that it would be following McDonald's lead by instituting a broad turnaround effort aimed at improving its margins and sending more money to its bottom line. Shareholders are hoping that the new measures can help keep up the company's historical growth rate, which has returned an impressive 30 percent since 2006. But will the strategy work?

Chief executive David Novak told a group of investors and analysts Wednesday that the restaurant chain would introduce new products, including beverages and breakfast meals, expand its value menus and offer healthier options at all three of its major US brands - KFC, Taco Bell and Pizza Hut. The initiative mirrors that of McDonald's, which experienced great success introducing healthier options, better food and more beverage choices.

Yum Brands also wants to increase its franchise locations by reducing its ownership of restaurants to below 10 percent by 2010. That would represent a substantial drop from the approximately 20 percent that it owns today. The company, like many others, has found that franchise locations have higher margins that owned operations. Combined, the company believes that all of these efforts could generate EPS growth of at least 10 percent in 2008.

"We know this works," said Novak during a meeting with a group of investors. "We're going to build a business we're proud of. We can do a lot better. Frankly, we're mad as hell that we haven't done better."

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