Burger King is planning to open hundreds of outlets in Russia in a new joint venture.
Burger King has partnered with Burger Rus, its largest franchisee in Russia and leading Russian investment bank, VTB Capital, and said it is committed to opening “several hundred Burger King restaurants over the next few years”.
“We are thrilled to announce this joint venture,” said José Cil, president, EMEA, Burger King Worldwide (BKW).
“We believe there is tremendous opportunity to rapidly increase our market share in Russia’s fast-growing and under penetrated quick-service restaurant (QSR) sector. Today’s announcement is a great example of our company’s strategy to accelerate international expansion by creating master franchisee agreements with strong local partners in high-growth markets.”
Burger Rus already has a strong presence in Russia, having opened 54 Burger King restaurants in the country in the last 30 months.
“Alex Kolobov and the leadership team at Burger Rus have an excellent track record,” Cil said. “We look forward to significantly expanding the scope of our partnership, while simultaneously introducing the iconic Burger King brand to millions of new consumers in Russia.”
According to Burger King, the newly formed Russian joint venture uniquely positions its brand for rapid expansion by combining financial resources with operational know-how. Under the terms of the partnership, the new venture has signed a long-term master franchise and development agreement with BKW, and has obtained the exclusive rights to expand the Burger King brand in Russia, the company said.
“The growth potential of the Russian QSR market is tremendous as we have witnessed by the success of the 54 Burger King restaurants that we already operate in the country,” said Kolobov, managing shareholder, Burger Rus. “The strength of the Burger King brand and its world-famous menu items, such as the iconic Whopper sandwich, are key drivers for further growth in this market.”
Tim Demchenko, head of private equity and special situations at VTB Capital, said: “This deal is yet another milestone in growing VTB Capital’s private equity business, and another example of VTB Capital successfully forming international partnerships to develop attractive market opportunities in Russia and CIS. We plan to continue entering into partnerships with top-tier international companies to take advantage of the strong underlying consumer demand and under penetrated market in Russia.”
BKW said the partnership with Burger Rus and VTB Capital is the latest example of its commitment to deliver on its international growth strategy in key developing markets. In 2011, BKW introduced a similar joint venture in Brazil focused on increasing market share in one of South America’s fastest-growing economies.