Church’s Chicken chain unveils Ukraine plans

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Dec. 19, 2007, 10:27 p.m. |
American fast-food chain plans to cluck its way into Ukraine next year through its Russian franchisee European Active Corporation nchisee European Active Corporation, which owns franchising rights in Russia, Ukraine and Belarus.

Church’s Chicken is following in the footsteps of McDonald’s, which has launched 58 restaurants in 16 cities since entering the market in 1997. In recent years, other fast-food chains have 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.

The inflow of international restaurant chains into Ukraine can be expected to continue over the next few years as global brands traditionally follow each other into national markets, experts said.

The first Church’s Chicken in the CIS opened last September in Moscow, and one is scheduled to open in Kyiv next year, said Zack Kollias, Church’s Chicken’s international operations vice president. Expansion plans call for the opening of 100 more restaurants in the CIS within the next seven years, with around 40 of these in Ukraine and Belarus. Investments into Church’s Chicken’s CIS expansion could total $20 million, according to Kollias.

Another major fast-food player to enter Ukraine in the next year is the number two international quick-service brand Kentucky Fried Chicken (KFC). US-based Yum Brands Inc., which operates 34,000 restaurants in more than 100 countries, including the KFC brand, had signed an 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.

The Ukrainian fast-food market’s growth potential is large, with saturation currently at 40 percent, according to Restaurant Consulting director Olga Nasonova. Annual growth in the business has totaled 20 percent, with the size of the market estimated at $700 million. Nasonova said the Ukrainian fast-food market is set for a boom, with international players increasingly eyeing the market.

“A number of international fast-food operators will follow their example with less fear, seeing its [the market’s] great development tempo and potential,” Nasonova said.
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