KFC’s parent company Yum halts development in Russia, a key market

A Kentucky Fried Chicken (KFC) restaurant in Tokyo, Japan, on December 14, 2021. REUTERS/Kim Kyung-Hoon

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NEW YORK, March 8 (Reuters) – Yum Brands Inc (YUM.N), the parent company of fried chicken chain KFC, said it was halting investment in Russia, a key market that helped the brand achieve record growth. last year.

Yum also said it was suspending operations of its 70 KFC company-owned restaurants in the country and finalizing an agreement to suspend all operations of Pizza Hut restaurants in Russia, in partnership with its main franchisee.

Yum, which has at least 1,000 KFC and 50 Pizza Hut locations in Russia that are nearly all independent franchisees, said in a post on its website dated Monday that it had “suspended all restaurant investment and development in Russia while we continue to evaluate additional options”. .”

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The restaurants are independently owned and operated through franchise agreements, which means Yum doesn’t have as much control as if it were running them itself, but it also has less exposure to financial and operational risk.

Last year was a record year of development for KFC, led by the opening of new restaurants in China, India and Russia, executives said during an earnings call on Feb. 9.

Overall, KFC International opened more than 2,400 gross units in 2021. In Russia, the company was opening about 100 new restaurants a year and hoped to continue “a similar expansion strategy in the future.”

Many companies have begun withdrawing their business from Russia amid sanctions and outrage over the invasion of Ukraine. Calls for more companies to do the same are growing. read more

McDonald’s Corp (MCD.N) said on Tuesday that it would temporarily close its 847 restaurants in Russia, including its iconic Pushkin Square location, mounting pressure on other global brands to halt operations in the country following Russia’s invasion of Ukraine. from Moscow. read more

Consumers and investors such as the New York state pension fund have pressured major global brands, including PepsiCo Inc (PEP.O), to withdraw from Russia.

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Reporting by Hilary Russ in New York and Jahnavi Nidumolu in Bangalore; Edited by Mark Porter and Anil D’Silva

Our standards: the Thomson Reuters Trust Principles.

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