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The Colonel’s chicken has arrived

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Dec. 21, 2012, 2:38 p.m. | Business — by Denis Rafalsky

The first KFC restaurant was opened in Ocean Plaza mall on December 14.
© Photo by Kostyantyn Chernichkin

Denis Rafalsky

Colonel Sanders, the originator of Kentucky Fried Chicken, is in Ukraine. The world’s third largest fast-food restaurant chain that bears the Colonel’s face on packaging as KFC’s official trademark opened its first outlet in the capital’s newly opened Ocean Plaza mall on Dec. 14.

Yum! Brands, the parent company of KFC as well as other popular fast food chains such as, Taco Bell and Pizza Hut, entered the market through a franchising arrangement with Ukrainian Food Company.

The company announced that it has deals with two other companies, Global Restaurant Group Ukraine and Happik, to start restaurant expansion in cities with populations of 300,000 or more.

At 300 square meters, the KFC outlet in Ocean Plaza can seat about 100 consumers. Yum said that 800,000 dishes will be sold yearly in the restaurant. 

And fried chicken will undoubtedly be the primary dish. The chief supplier of chickens is London-listed Myronivsky Hliboproduct, Ukraine’s largest poultry producer. Despite having its own fast food chain in Kyiv called Kryla (Wings), which also specializes in chicken dishes, MHP became KFC’s supplier for the the region

Alexander Garagaty, director of technology and innovations of YUM! Restaurants International Russia and CIS, said at the restaurant’s opening that he is very satisfied with the partnership with MHP.

“Our strategy is to use, as much as possible, domestic products (in dish production),” he said adding that about 40 percent of food stuff for the KFC restaurant is produced locally. Also on the list are beer and soft drinks.

The first Ukrainian KFC offers classical buckets of chicken legs and wings, chicken strips, sandwiches and wraps. The average meal in the restaurant is supposed to be Hr 30-35.

As Kyiv Post wrote, the minimum financial requirement to open a KFC in the U.S., according to the company’s website, is $1.5 million net worth and $750,000 in liquid assets. According to Yuriy Babych, franchising director for Yum! Restaurants International Russia and CIS, a franchisee can expect to break even on investment within three to seven years.

“This is a business that doesn’t develop in just one year or two, but one that you have your children inherit,” Babych told Kommersant newspaper. 

Yum’s website added that financial requirements vary country to country. However, addressing investment requirements, Alexander Safonkin, director of Ukrainian Food Company, said “the investments (in opening a KFC outlet) either in America, or Russia, or Ukraine are approximately the same.” 

According to Safonkin, his Ukrainian food company plans to open about 10 restaurants in the course of five years, including five eateries  by the end of 2013. The company is actively working with developers across Ukraine, though Safonkin refuses to specify where the next KFC restaurant will open.   

Meanwhile, Yum chose two additional franchisees with which to expand: Global Restaurant Group Ukraine and Happik, the developer of the Mafia restaurant chain.

Garagaty affirmed his company has a large appetite for Ukraine. “We have opened far from the last restaurant in Ukraine. We have come here for a long time looking ahead with confidence.”

Sources say the Ukrainian Food Company was created this year exclusively to become a KFC franchisee. The owner is businessman Nasib Piriyev, a native of Azerbaijan. He is a reportedly the co-owner of PNN Group which is involved in different sectors, such as petrochemistry and production of methanol in the Caspian region.  In Ukraine and Azerbaijan, PNN is behind the De Beers chain of jewelry shops and Hamley’s toy stores. The company opened 4 KFC restaurants in Azerbaijan.

Kyiv Post staff writer Denis Rafalsky can be reached at rafalsky@kyivpost.com 

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