McDonald's in franchising deal with Russia's Rosinter

Tue Apr 10, 2012 9:34am EDT
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By Natalia Ishchenko

MOSCOW (Reuters) - McDonald's Corp (MCD.N: Quote) will franchise out restaurants in Russia for the first time after picking the sector's largest restaurant holding company Rosinter ROST.MM as its partner in the fast-growing market.

McDonald's, which relies heavily on franchises in more mature markets such as the United States, has so far been expanding in Russia through self-operated stores only.

The agreement with Rosinter is aimed at "growth and expansion", said Khamzat Khasbulatov, McDonald's Russia president.

"If this model proves successful, we will start to spread it around. We are looking at a long-term perspective," he told Reuters, adding the model could in future help it to tap remote Russian regions such as the Far East.

Western restaurant chains have made Russia a top priority as rising wages and consumer spending have increased growth prospects in the emerging market.

The test project will see Rosinter open McDonald's restaurants in airports and railway stations, said Khasbulatov. He refused to provide more details, saying only that expansion through self-operated restaurants remained a priority in Russia.

McDonald's, which first opened in Moscow in 1990, before the collapse of the Soviet Union, has 314 stores in Russia and plans to open 40-45 new self-operated locations each year.

Rosinter already operates the T.G.I. Friday franchise in Russia and has a joint venture with Britain's Whitbread (WTB.L: Quote) to develop its Costa Coffee brand.   Continued...

A large order of McDonald's french fries is shown May 22, 2008. REUTERS/Sam Mircovich