Yum Brands has completed its exit from Russia with the sale of its KFC business to Smart Service Ltd., a local operator led by Konstantin Yurievich Kotov and Audrey Eduardovich Oskolkov.
The sale, first announced in October, includes more than 100 Russian KFC restaurants, operating system, master franchise rights and the trademark for the Rostik’s brand. Further, Smart Serve has agreed to retain Yum’s employees in the market as it rebrands to Rostik’s and the company will be responsible for working with other franchisees in the market to rebrand as well.
Yum’s efforts to disentangle its business from Russia began about two weeks after the country’s late-February 2022 invasion of Ukraine. On March 7, 2022, 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. Last summer, Yum Brands completed its transfer of ownership of all Pizza Hut franchise assets in Russia to a local operator with a non-Yum rebrand.
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 There are no Taco Bell or Habit Burger Grill restaurants in Russia.
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’s unit growth by 2 percentage points and the company has adjusted its metrics to reflect its exit.
Contact Alicia Kelso at [email protected]
