Burger King targets Russia, China
19 June, 2012
Burger King is to push east with ambitious plans for hundreds more restaurants in Russia and up to a thousand in China.
Both opening programmes will come via joint ventures, and mark a step up in Burger King’s global ambitions as it bids to compete with arch rival McDonald’s. In Russia, the deal involves Burger Rus, the country’s largest Burger King franchisee, and VTB Capital, a leading investment bank. The partnership will see “several hundred” new restaurants open over the next few years.
Burger Rus has opened 54 Burger King restaurants in the last two and a half years, and picks up exclusive rights to the Russian expansion as part of the deal. Jose Cil, EMEA president at the Burger King parent group, said: “We believe there is tremendous opportunity to rapidly increase our market share in Russia’s fast growing and underpenetrated quick service restaurant sector.”
Burger King said the JV model for the Russia expansion would bring together operational know-how and local knowledge. It also flags up the potential in Russia for global brands. Alexander Kolobov, managing shareholder at Burger Rus, 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 have already opened in the country.”
The China deal is with the Kurdoglu family, the master franchisee for the country; and private equity group Cartesian Capital. It is for up to 1,000 openings over the next five to seven years, and is the largest development agreement in Burger King’s history. As in Russia, the deal gives the JV team exclusive rights to development. There are currently 63 Burger King restaurants in China.
Elias Diaz Sese, president of BK Asia Pacific, said: “Expanding our brand’s presence in China further exemplifies our company’s commitment to strengthening our global restaurant portfolio and establishing a strong brand presence in key growth markets around the world. We have partnered with solid investors and experienced restaurant operators to accelerate our net restaurant growth in China.”
The Kurdoglu family has already grown a 450-strong Burger King franchise in Turkey. Erhan Kurdoglu, chairman of the new JV, said: “We are very excited to expand our relationship with Burger King and further establish the brand’s presence in such an exciting, active market with a vibrant economy and substantial growth potential.”