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McDonald's boosts franchises to expand in Russia

A customer buys food at a McDonald's restaurant in Moscow February 1, 2010. REUTERS/Denis Sinyakov
A customer buys food at a McDonald's restaurant in Moscow February 1, 2010. REUTERS/Denis Sinyakov

MOSCOW (Reuters) - McDonald's Corp is widening its franchise operations in Russia to drive expansion deeper into provincial areas as rival international restaurant chains flock to the growing market.

The fast-food chain, which has run its own outlets since launching in Russia in 1990, is lining up more partners after last year picking Russia's largest restaurant holding company Rosinter as its first franchisee.

"Beyond the Urals, we are interested in Western and Eastern Siberia, and we are also considering franchising out restaurants in (Russia's western) enclave of Kaliningrad," Russia CEO Khamzat Khasbulatov told a news conference.

He said franchises would be used mainly in areas where it was economically less attractive for self-operated restaurants.

Rosinter will open its first restaurants in Moscow and St Petersburg before year-end.

McDonald's, the world's biggest restaurant company by revenue, also plans to open at least 150 self-operated restaurants in Russia over the next three years.

"We will keep the pace of growth we have been showing so far," said Khasbulatov. McDonald's has 357 restaurants in more than 85 Russian cities, of which 46 were opened last year.

McDonald's was the first international fast-food chain to tap the Russian market when it opened at Moscow's Pushkin Square before the collapse of the Soviet Union.

The branch had the highest sales and served the most customers of any McDonald's outlet last year.

U.S. Rival Yum Brands Inc , owner of the KFC brand, said this month it planned to open up to 70 restaurants in Russia and other former Soviet countries this year and was looking for new franchise partners to help drive growth.

Other global fast-food chains including Subway and Burger King are also actively expanding in Russia.

(Reporting by Maria Kiselyova; Editing by David Cowell)

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