Burger King Worldwide Holdings, Inc. (“BKW”) today announced the establishment of a new joint venture in Russia focused on aggressively expanding the Burger King brand presence in this high-growth emerging market. Under the new partnership, BKW, Burger Rus, the largest Burger King franchisee in Russia, and VTB Capital, a leading Russian investment bank, are committed to opening several hundred Burger King restaurants over the next few years.
“We are thrilled to announce this joint venture,” said José Cil, president, EMEA, BKW. “We believe there is tremendous opportunity to rapidly increase our market share in Russia’s fast-growing and underpenetrated quick-service restaurant (QSR) sector. Today’s announcement is a great example of our company’s strategy to accelerate international expansion by creating master franchisee agreements with strong local partners in high-growth markets.”
Burger Rus already has a strong presence in Russia, having opened 54 Burger King restaurants in the country in the last 30 months. “Alex Kolobov and the leadership team at Burger Rus have an excellent track record,” Cil continued. “We look forward to significantly expanding the scope of our partnership, while simultaneously introducing the iconic Burger King brand to millions of new consumers in Russia.”
The newly formed Russian joint venture uniquely positions the Burger King brand for rapid expansion by combining significant financial resources with industry-leading operational know-how. Under the terms of the partnership, the new venture has signed a long-term master franchise and development agreement with BKW, and has obtained the exclusive rights to expand the Burger King brand in Russia.
“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 already operate in the country,” said Alexander Kolobov, managing shareholder, Burger Rus. “The strength of the Burger King brand and its world-famous menu items, such as the iconic Whopper sandwich, are key drivers for further growth in this market.”
Tim Demchenko, Head of Private Equity and Special Situations at VTB Capital, said: “This deal is yet another milestone in growing VTB Capital’s private equity business, and another example of VTB Capital successfully forming international partnerships to develop attractive market opportunities in Russia and CIS. We plan to continue entering into partnerships with top-tier international companies to take advantage of the strong underlying consumer demand and underpenetrated market in Russia.”
The partnership with Burger Rus and VTB Capital is the latest example of BKW’s commitment to deliver on its aggressive international growth strategy in key developing markets. In 2011, BKW successfully introduced a similar joint venture in Brazil focused on increasing market share in one of South America’s fastest-growing economies.
Burger Rus was advised in the transaction by Olympia Capital, which also retained a minority stake in Burger Rus within the framework of the joint venture.