By Tatiana Gomozova and Alexander Marrow
MOSCOW (Reuters) – Former KFC restaurants in Russia will begin reopening as Rostic’s on Tuesday, as the new owners revive a brand born soon after the collapse of the Soviet Union as Russia transitioned abruptly from communism to capitalism in the 1990s.
KFC’s U.S. parent company Yum! Brands Inc last week finalised 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.
Rostic’s, originally launched in 1993 and became KFC’s vehicle for expansion in Russia, where it had over 1,000 restaurants before Yum! Brands announced plans to exit last year after Russia despatched troops to Ukraine.
KFC partnered with Rostic’s in 2005 before later buying it out. At Tuesday’s launch in Moscow, KFC’s red and white colours were on full show.
The new owners, who had previously operated around 40 restaurants, said the possibility of Yum! Brands one day returning to Russia had not been ruled out. Yum! Brands could not immediately be reached for comment.
Madrid-based AmRest Holdings, 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 is responsible for rebranding and retaining employees.
The revamp mirrors that of former McDonald’s 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 RBC. Furthermore, the menu will barely change.
“We have reached an agreement that we will keep the full menu and only four items will be renamed in it – the dishes themselves, tastes and quality, which were the components of our brand, will stay as is,” TASS quoted Kotov as saying in November.
($1 = 0.9069 euros)
(Reporting by Tatiana Gomozova and Alexander Marrow; Editing by Sharon Singleton)
