(FORTUNE Magazine) – In January, when PepsiCo CEO Roger Enrico disclosed his plan to spin off his restaurant division--KFC, Taco Bell, and Pizza Hut--observers asked why he'd jettison a huge enterprise ($10 billion in sales, estimated) before finding people to run it.

The answer is that Enrico had no clear idea at the time who should head up the nameless new company. Shortly after the announcement he asked the top two contenders--David Novak, CEO of Pizza Hut and KFC, and John Antioco, CEO of Taco Bell--to decide who should be No. 1 and No. 2. Unsurprisingly, the two deadlocked. FORTUNE has learned that Enrico took the extraordinary step of hiring a headhunter to find a suitable outsider, at which point Enrico would decide among all three. A PepsiCo spokesman calls this convoluted bake-off "the normal process you'd expect when selecting the leadership of a $10 billion corporation."

The spinoff of the restaurant division elevates the importance of Frito-Lay, Pepsi's snack-food operation. "Frito-Lay is the Coke of snack foods without a Pepsi," Enrico has told FORTUNE. He considers Frito-Lay's overseas expansion as Pepsi's best growth opportunity. --Linda Grant