Industry News | June 24, 2005

Yum Brands Agrees to Five-Year Deal With Rostik

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Yum Brands Inc., owner of the KFC brand, and Rostik Restaurants Ltd., owner of a Russian chicken restaurant chain, have formed a partnership to develop fast-food restaurants in Russia, according to a news release.

Louisville-based Yum's international division, Yum Restaurants International, based in Dallas, will provide financial support of up to $30 million through loans and guarantees to develop 300 restaurants in about 30 Russian cities and the Commonwealth of Independent States. Rostik Restaurants will invest $100 million in the project.

The restaurants will be co-branded; Rostik's brand name will remain prominent, and Yum's KFC brand will be "strategically positioned" on restaurant signs, according to the release. Rostik will retain day-to-day operational management. The co-branded chain will sell products from both brands.

At the end of this five-year agreement, the companies will have the option to transfer ownership of Rostik's chicken restaurants to Yum or to maintain the current arrangement.

Yum Restaurants International is the largest division of Yum Brands Inc., with more than 11,000 restaurants in 100 countries. Yum currently operates 12 KFC brand restaurants in Moscow and St. Petersburg.

Yum Brands Inc. is the world's largest restaurant company, with about 34,000 restaurants.