KFC rebrands to Rostic's as American owner exits Russia

KFC rebrands to Rostic's as American owner exits Russia
/ bne IntelliNews
By bne IntelliNews April 28, 2023

Former KFC restaurants in Russia have begun to reopen as Rostic's after US owner Yum! Brands finalised its exit from Russia, transferring rights to local company Smart Service. 

Despite a rebrand, Smart Service has opted to retain employees and suppliers and keep the popular KFC menu unchanged, albeit with a few renamed dishes. The immediately recognisable red-white colour scheme will also remain, along with the iconic buckets that have become synonymous with the KFC brand. Colonel Sanders is, however, gone.  

Over the next 18 months, the company plans to convert KFCs throughout the country to Rostic’s. However, in an apparent show of goodwill towards its franchisees, the new owners have vowed to continue to work alongside those that opt to retain the internationally recognisable KFC branding.

When Yum! Brands chose to leave Russia in 2022, there were more than 1,100 KFC outlets in the country. Smart Service is now the operator of 70 restaurants, with the rest the vast majority being run on their behalf by 22 different franchisees. Smart Service owns the master franchise rights. According to Konstantin Kotov, co-owner of Smart Service,  the company's 22 partners have expressed an interest in expanding their operations by developing a franchise network. Prior to the acquisition, Smart Service itself was a franchisee, operating 41 KFC restaurants primarily in the city of Izhevsk.

The rebranding is similar to that of many other Western food and retail outlets that chose to leave the Russian market following President Vladimir Putin’s decision to launch a full-scale invasion of Ukraine. These include the likes of McDonald’s and Starbucks, both of which sold their restaurants to local franchisees, and are yet to make any significant changes to their offerings. 

However, unlike the renaming of McDonald’s (now “Tasty and that’s it”) and Starbucks (“Stars Coffee”), Rostic’s is not a new name. The original Rostic’s first opened its doors in 1993 as one of the pioneers of fast food in Russia, gaining immense popularity as it expanded nationwide. Just a couple of years later, KFC entered the market, immediately becoming Rostic’s main rival. In 2005, in response to mounting competition from a plethora of global fast-food giants entering the Russian market, the two companies opted to partner together to establish their dominance in the chicken market. Just five years later, KFC bought out Rostic’s, leaving only the US brand in place.

While the revival of an old favourite has brought back good memories for many Russians, there has been some disappointment due to the lack of resemblance between the newly opened chain and the original Rostic's. Classic dishes such as chicken kebab and borsch from the original Rostic’s menu are seemingly not making a comeback. Meanwhile, the original logo, interior decor and colour scheme have been left in the past.

“Absolutely nothing has changed, just the name,” Vladimir, 33, told bne IntelliNews, on the first day after the official opening of the flagship restaurant on Moscow’s Tverskaya Street. “I wanted some childhood nostalgia but I’ve decided not to even order.”