Yum! Brands transfers rights to Russian assets to franchise operator Smart Service
MOSCOW. Oct 25 (Interfax) - Yum! Brands has entered into a sale and purchase agreement to transfer ownership of its Russian KFC restaurants, operating system and master franchise rights, including the network of KFC franchised restaurants, to Smart Service Ltd., which is operated by one of the company's existing KFC franchisees in Russia, Konstantin Kotov and Andrei Oskolkov, the U.S. fast food company reported.
"Under the agreement, the buyer will be responsible for rebranding locations to a non- Yum! concept. In addition, the buyer will be responsible for retaining the Company's employees in Russia. Completion of the transaction is subject to regulatory and governmental approvals, as well as other conditions agreed to by the parties," the company said.
"Following the completion of the transaction, Yum! Brands will have ceased its corporate presence in Russia," the company said.
Kommersant reported that the assets being sold are worth an estimated 1.3 billion rubles. The new owner will have to rebrand all 1,000 KFC restaurants in Russia to the Rostic's brand, which Yum Restaurants Russia LLC registered on September 1, 2022.
Smart Service Ltd. is registered in Izhevsk, data from the SPARK-Interfax system showed.
There were about 1,000 KFC fast food restaurants and 50 Pizza Hut restaurants operating in Russia in early 2022. Yum! Brands subsidiary Yum Restaurants Russia LLC operated about 70 KFC restaurants and the rest were franchises.
Yum! Brands suspended the operation of its own KFC restaurants in Russia and investment in the Russian market in March. In May, the company transferred the Pizza Hut franchise to a local operator, who began rebranding the restaurants.
Yum Restaurants Russia increased its net profit by 45% to 1.9 billion rubles in 2021 as revenue grew by 31.5% to 18.29 billion rubles.
Yum! Brands Inc. Is the world largest fast food company by number of restaurants. It owns the KFC chain of fried chicken restaurants, as well as the Pizza Hut and Taco Bell chains. More than 50,000 restaurants operate under the company's brands, with most managed by franchise partners.