A Polish franchise operator of KFC, Pizza Hut, and Burger King in central and eastern Europe is set to purchase a 30 percent stake in Kroshka Kartoshka.
AmRest Holdings, a Polish franchise operator of KFC, Pizza Hut, and Burger King in Central and Eastern Europe, is set to purchase a 30 percent stake in Russian fast food chain Kroshka Kartoshka by the end of the month.
In Ukraine, Kroshka Kartoshka is represented by fast food chain Pechena Kartoplya, and the acquisition will ease AmRest’s entrance onto the Ukrainian market to launch its more famous global fast food franchises later, said Olga Nasonova, director of Kyiv-based Restaurant Consulting.
“International investors have switched their attention to the Ukrainian fast food market, especially to its successful players,” she said.
AmRest will pay $36.2 million for a 30 percent stake in Kroshka Kartoshka, the company said. Kroshka Kartoshka owns a 51 percent stake in the Pechena Kartoplia brand in Ukraine, which has 15 restaurants in Kyiv, Odesa, Vinnytsia, and Dnipropetrovsk.
AmRest will follow in the footsteps of American fast food chain Church’s Chicken, which announced plans late last year to enter the Ukrainian market through its Russian franchisee, European Active Corporation.
Only the second fast food chain to launch a major entry to Ukraine after McDonald’s, Church’s Chicken will open a restaurant in Kyiv this year after its CIS debut in Moscow in September.
Starting last year, international chains started to buy successful Ukrainian chains, such as Mak-Smak, Coffee Time, and Smachna Kartoplia, Nasonova added.
In recent years, other fast food chains tiptoed onto the market. Most recently in 2006, US-owned pizza chain Sbarro set up shop with two restaurants: one in Kyiv and another in Donetsk.
Earlier this month, AmRest announced the completion of a due diligence review of Kroshka Kartoshka.
Both AmRest and Kroshka Kartoshka’s Moscow headquarters declined to comment on the future acquisition and business development in Russia and Ukraine.
AmRest was created in 2000 as a joint venture between American Retail Concepts and Yum Brands, the largest operator of quick-service restaurants in the world, according to the company’s Web site.
US-based Yum Brands Inc., which owns KFC, signed a November 2005 agreement with the Russian Rosinter family of restaurant chains to develop KFC in Russia and the CIS and re-brand its Ukrainian Rostik’s restaurants as KFC eateries.
It remains unclear whether KFC will arrive in Ukraine through the Rosinter chain or AmRest, which declined comment on current projects.
In addition to running KFC and Pizza Hut franchises in Poland and the Czech Republic, AmRest also runs its own Rodeo Drive and FreshPoint chains in Poland.
The Ukrainian fast food market’s growth potential is large, with saturation currently at 40 percent, according to Nasonova. Annual growth in the business is about 20 percent, with the market estimated at $700 million.
“A number of international fast food operators will follow their example with less fear, seeing the market’s great development tempo and potential,” Nasonova said.
