KFC brand owner Yum! Brands and Rostik Restaurants Limited, owner of Russia’s top chicken restaurant chain, are teaming up in a unique strategic business alliance to establish market leadership in the quick service restaurant sector in Russia and the Commonwealth of Independent States, it was announced today (Friday).
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Under the deal RRL will make an investment of up to $100m over the next five years to support the development of some 300 co-branded Rostik’s/KFC restaurants. Yum! will provide financial support including the provision of loans and guarantees up to $30m to support this development. The Rostik’s brand name will remain prominent, while the KFC brand also will be strategically positioned on restaurant signage. The restaurants will serve both Rostik’s local favorites and KFC’s chicken products to Russian and CIS consumers.
At the conclusion of this five-year business alliance, Yum! and RRL will have the option to transfer ownership of the Rostik’s business to Yum! Alternatively, both parties may choose to maintain the current business arrangement.
Today Rostik’s manages 80 restaurants in Russia and CIS. Yum! Brands has 12 licensed KFC restaurants in Moscow and St. Petersburg. Under the agreement, RRL will retain day-to-day operational management, while Yum! Brands will provide strategic support through its experience and technologies in managing international quick service brands.
“Rostik’s is a highly successful and respected brand, led by a great entrepreneur Rostislav Ordovsky, which makes this the perfect business partnership as we bring KFC products to even more consumers in this important part of the world,” said Yum! Brands chairman and CEO David Novak. “We are very excited about this growth opportunity for Yum! Restaurants International. KFC and Rostik’s will now offer two great brands under one roof, with more choice and convenience, and a combined menu of great tasting products, excellent value and world-class service.”
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By GlobalData“This is an ideal combination of the best from the East and West,” said RRL chairman and CEO Rostislav Ordovsky-Tanayevsky Blanco. “By joining forces with such a global partner, Rostik’s is not only getting the financial support for growth, but also the access to Yum! Brands’ years of international experience and technology. I am confident that our cooperation will bring both parties important synergy for growth. We will unite our best practices to accelerate our growth in Russia and the CIS. The first ones to benefit from this cooperation are our customers. This innovative alliance will enable us to provide the services and wide variety of products our customers want.”
Russia’s deputy prime minister Alexander Zhukov welcomed the signing of the deal, saying that this event is a significant development for local small and medium enterprises in Russia.
“A Western company investing in the development of a Russian brand is a unique development in itself,” he said. “It also demonstrates the strength of our country’s economy in attracting foreign investment.”
The agreement covers Russia and all other CIS countries, and RRL plans on opening both company-owned and franchised Rostik’s/KFC restaurants in as many as 30 cities throughout the region.
