Former KFC restaurants in Russia are reportedly in turmoil as re-branding entails a drop in revenue, according to sources.
Departure from Russia
Spain-based restaurant operator, AmRest, said in a statement on 7 December that it agreed to sell its KFC restaurant business in Russia for at least €100 million to Russian restaurant and entertainment company, Almira.
In March, AmRest began the process of temporarily suspending the operations of its brands in Russia after a relevant announcement was made by Yum! Brands, the owner of the KFC and Pizza Hut brands.
Closure of the deal is subject to approval from the competition authority in Russia, Yum! Brands and other approvals by regulatory authorities in Russia. The company stated that the final terms of the transaction are subject to some external factors, including the exchange rate.
KFC used to be one of the leading fast-food chains in the Russian market. AmRest operates 215 outlets, primarily in the largest Russian cities. In total, more than 1,000 KFC restaurants operated in the country at the beginning of 2022.
Transition causes pain
Some KFC restaurants in Russia have already changed their banners to a new chain named Rostic’s. However, such a step entailed a nearly 20% drop in revenue, estimated Sergey Mironov, chairman of the coordinating council of the Federation of Restaurateurs and Hoteliers.
He explained that all franchise holders have individual license agreements, which means that some restaurants have to change their banners earlier than others. The problem is that the KFC brand has strong recognition among Russian customers, and Rostic’s has not.
“It is unclear what franchises should do in this situation. If it converts into Rostic’s, it will help the new owner to develop its brand. If it stays as KFC, sooner or later, it will still have to change it [the name] due to the expiration of the license agreement. My advice: is to switch to their own brands,” Mironov said, adding that still, this situation is “deadly” for the businesses.
Turbulent fast food market landscape
In 2022, the KFC chain will likely experience a rise in revenue in Russia, despite huge turbulence in the country’s restaurant industry, which is primarily attributed to the withdrawal of Mcdonald’s from the market in the middle of the year, the Russian think tank Infoline Analytics said. Like Burger King, and other major fast-food chains, KFC managed to attract some customers, which previously were primarily loyal to Mcdonald’s, the analysts assumed.
FAQs
Yum! Brands in April finalised its exit from Russia, transferring master franchise rights to Smart Service, a local franchisee led by businessmen Konstantin Kotov and Andrey Oskolkov. The deal included all its Russian KFC restaurants, operating system and the trademark for the Rostic's brand.
Is Burger King still operating in Russia? ›
While Burger King remains open for business in Russia, its biggest rival McDonald's, which corporately owned most of its restaurants, has managed to leave the country. KFC's parent company Yum! Brands has also sold more than 100 restaurants to a local operator in Russia, which were rebranded as Rostic's in April.
Which country is KFC most successful in? ›
China is its biggest market with more than 5,600 outlets while 12 million people eat at KFC restaurants every day around the world. As of 2021, KFC has approximately 25,000 locations in over 145 countries and territories globally.
What American restaurants are still in Russia? ›
KFC is the most prolific American fast food brand in Russia with over around 1,000 premises across the country. That is followed by McDonalds with close to 847, and Burger King, which operates roughly 800 restaurants in Russia. There are also 130 Starbucks coffee shops and 50 Pizza Hut restaurants in Russia.
What replaced KFC in Russia? ›
The new owners of the US giant's former restaurants across Russia are resuscitating Rostic's, a brand that appeared in the tumultuous early years of post-Soviet Russia.
Is Pizza Hut still in Russia? ›
Brands and KFC have ceased their corporate presence in Russia. Yum! Brands previously announced that it had completed the transfer of ownership of all Pizza Hut franchise assets in Russia to a local operator who initiated the process of re-branding locations to a non-Yum! concept.
Is Popeyes in Russia? ›
RBI's three other fast-food brands — Popeyes, Tim Hortons, and Firehouse Subs — don't have any locations in Russia.
Is Subway still in Russia? ›
In Russia for more than 20 years, Subway operates 550 restaurants in 122 cities in the region, making the Subway chain in Russia the third largest in Europe, and putting it on the list of those "financing the murders of Ukrainians," according to the agency.
What fast-food companies are still in Russia? ›
A small cohort of six American fast-food chains decided otherwise. The franchises of Subway, Carl's Jr., Papa John's, Costa Coffee, Burger King, and TGI Fridays have continued to operate, business as usual.
Does Pepsi own KFC? ›
Yum Brands Inc., is a restaurant company that owns quick-service chains Taco Bell, Pizza Hut and KFC, as well as fast-casual brand The Habit Burger Grill. It is headquartered in Louisville, Ky. Yum Brands was initially part of PepsiCo, which entered the restaurant business in 1977 with the acquisition of Pizza Hut.
Yum China Holdings, Inc. operates China's leading restaurant concepts, including KFC and Pizza Hut brands, as well as emerging brands including Taco Bell, Little Sheep, Huang Ji Huang and Shaofaner.
Who is KFC owned by? ›
Yum! Brands has over 55,000 restaurants in 155 countries and territories operating the Company's restaurant brands – KFC, Pizza Hut, Taco Bell and The Habit Burger Grill.
Is Arby's in Russia? ›
1 Arby's Fast-Food Location in Moscow
The perfect sandwich is ready and waiting right here in Moscow. How does a Classic Roast Beef or French Dip sound?
What is McDonald's new name? ›
The new name also comes with a new sauce. McDonald's has decided to cosplay as its animated alter ego. Starting Feb. 26, the fast-food chain launched a manga-inspired makeover, embracing the upside-down golden arches featured in some of anime's most iconic movies and shows, where it is cheekily known as “WcDonald's.”
What is the new name for McDonald's in Russia? ›
Due to the Russian invasion of Ukraine, McDonald's temporarily suspended all operations in the country on 8 March. In May, the company announced that it would sell all of its restaurants in Russia, which were rebranded as Vkusno i tochka.
Which fast food restaurants are still in Russia? ›
The franchises of Subway, Carl's Jr., Papa John's, Costa Coffee, Burger King, and TGI Fridays have continued to operate, business as usual.
Does KFC do business in Russia? ›
Timing: KFC entered the Russian market earlier than McDonald's did. KFC opened its first restaurant in Moscow in 1993, while McDonald's didn't open its first restaurant in the country until 1990. This gave KFC a head start in establishing its brand and presence in the Russian market.
Why did KFC leave Russia? ›
Originally launched in 1993 while Russia was transitioning from communism to capitalism, Rostic's became KFC's vehicle for expansion in Russia, where it had more than 1,000 restaurants before Yum! Brands announced plans to exit last year after Russia despatched troops to Ukraine.
