On Tuesday, former KFC outlets in Russia will reopen as Rostic’s as the new owners resuscitate a brand founded after the Soviet Union collapsed and Russia rapidly switched from communism to capitalism in the 1990s.
Last week, Yum! Brands Inc. (YUM.N), KFC’s parent company, transferred master franchise rights to Smart Service, a local franchisee by Konstantin Kotov and Andrey Oskolkov. The acquisition includes all Russian KFC locations, the operating systems, and Rostic’s trademark. Unknown pricing.
Rostic’s, founded in 1993, helped KFC expand in Russia, where it had 1,000 locations before Yum! But, after Russia invaded Ukraine last year, brands declared their departure.
KFC bought Rostic’s after partnering with it in 2005. As a result, KFC’s red and white were prominent during Tuesday’s Moscow opening.
The new owners, who owned 40 restaurants, indicated Yum! Brands might return to Russia. Unfortunately, Yum! Brands did not respond promptly.
In February, Madrid-based AmRest Holdings (EATP.WA), a franchisee with over 200 restaurants, sold its business to Smart Service for 100 million euros ($110.3 million).
Smart Service rebrands and retains staff.
Last summer, a local licensee renamed old McDonald’s (MCD.N) restaurants Vkusno & tochka (‘Tasty & that’s it’).
Kotov told RBC that KFC’s brand would survive because franchisees with current agreements may stay open. The menu will scarcely change.
“We have reached an agreement that we will keep the full menu and only four items will be renamed – the dishes themselves, tastes and quality, which were the components of our brand, will stay as is,” Kotov told TASS in November.
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