Yum Brands has sold its KFC restaurants in Russia to local franchisee Smart Service Ltd., which is responsible for rebranding the approximately 1,000 KFC restaurants into non-Yum entities. Once the transaction is finalized, it will mark the global restaurant company’s full exit from the country.
Yum’s transfer of Pizza Hut ownership was completed in July, also to a local operator, Noi-M, who has since rebranded the locations to Pizza H, according to TAdviser. There are no Taco Bell or Habit Burger Grill restaurants in Russia.
Yum’s efforts to disentangle its business from Russia began about two weeks after the country’s late-February invasion of Ukraine. On March 7, Yum announced it was pausing investment and development in Russia. A day later, Yum went a step further and suspended KFC company-owned restaurants and announced a finalized agreement to suspend all Pizza Hut operations in the country.
Prior to these announcements, Yum’s Russia presence included approximately 1,000 KFC restaurants and 50 Pizza Hut locations, nearly all of which were operated by licensees or franchisees.
Notably, Russia had been a unit growth target for KFC International and the brand opened nearly 430 net new units during Q2 2021 with “significant builds” in Russia, along with China, India, Latin America and Thailand, CFO Chris Turner said during that earnings call.
During Q1 2022 in May, the company’s first earnings call following its Russia announcement, Turner said Yum opened about 100 net new units in the market in 2021. The removal of the Russia business impacted Q2 unit growth by 2 percentage points and the company has adjusted its metrics to reflect its exit.
Yum’s exit from Russia follows similar moves from McDonald’s, which sold its business to a local buyer in May for an undisclosed price, and Starbucks, which ceased operations of its 130 licensed locations in Russia in May.
