Buyer of KFC in Russia agrees to rebrand two-thirds of chain's restaurants as Rostic's

MOSCOW. April 25 (Interfax) - Smart Service Ltd, the buyer of KFC's Russian assets, has agreed with the owners of two-thirds of the chain's restaurants to switch to the Rostic's brand, Smart Service's co-owner Konstantin Kotov told reporters.

"An agreement has been reached on transferring two-thirds of the chain [to the Rostic's brand], meaning that we have verbally agreed with about 700 of the 1,100 restaurants," Kotov said at a press conference on Tuesday.

Kotov named neither the regions nor the timeframe for rebranding the restaurants, though he did say that transferring all of the chain's restaurants overall is planned to occur within one-and-a-half years. He noted that if a particular franchisee does not want to switch to the Rostic's brand, then it would be able to continue operating as KFC, though it could not open new restaurants under the old brand.

"In general, there is a constructive conversation with partners. This means that there is not a discussion on whether this is necessary or not [to switch to the new brand], but, rather, how to do it, how quickly, and in stages. What is more important to launch at first," Kotov said.

Kotov also said that the company expected to open around 1,000 new restaurants within five years.

Yum! Brands Inc. in April announced the sale of KFC in Russia to Smart Service Ltd.

The parties agreed that Smart Service would rebrand the chain as part of the deal, thereby renaming KFC as Rostic's, namely more than 100 restaurants; and that Smart Service would be responsible for the rebranding of other franchisees in the Russian Federation.

The chain currently comprises 1,100 restaurants, 66 of which are corporate.