Some former KFC restaurants in Russia began reopening as Rostic's on Tuesday, as the new owners revive a brand born soon after the collapse of the Soviet Union, although franchise agreements mean the US chain's brand is set to live on.
KFC's US parent company Yum! Brands Inc. (YUM.N) last week finalized its exit from Russia, transferring master franchise rights to Smart Service, a local franchisee led by Konstantin Kotov and Andrey Oskolkov. The deal included all its Russian KFC restaurants, operating system and the trademark for the Rostic's brand. The price was not disclosed.
Kotov, flanked by Rostic's red, white and black logo at a press conference in Moscow to mark the opening, said his firm would support franchisees that choose to stay as KFC and would not force them to switch.
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 dispatched troops to Ukraine.
KFC partnered with Rostic's in 2005 before later buying it out.
The new owners said the possibility of Yum! Brands one day returning to Russia had not been ruled out. Yum! Brands did not immediately respond to a request for comment.
Madrid-based AmRest Holdings (EATP.WA), a major franchisee which operated over 200 restaurants, in February said it had sold its restaurant business to Smart Service in a deal worth around 100 million euros ($110.3 million).
Smart Service, which now controls over 100 restaurants, is responsible for rebranding and retaining employees.
The revamp mirrors that of former McDonald's (MCD.N) restaurants, which were also taken over by a local licensee last summer and rebranded as Vkusno & tochka, or 'Tasty & that's it'.
But while McDonald's imposed stringent restrictions on the use of its brand and products, KFC's brand will linger as franchisees with existing agreements can remain open, Kotov told Russian news outlet RBC. Furthermore, the menu will barely change.
"The dishes we make are completely the same as KFC," Kotov said. KFC's Boxmaster is being renamed Rostmaster and the Twister will become the Chef-Roll. All suppliers will remain the same.
"We can no longer open KFC restaurants, unfortunately, but we are obliged to support them," he said. "Our main goal is to rebrand. We have a plan to finish the whole country in 18 months."
($1 = 0.9069 euros)
Reuters