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McDonald's is ready to hand over 20% of restaurants in Russia to local partners

January 26, 2016, 1:57 UTC+3 MOSCOW

It would be a good figure and a good starting point, McDonald’s president in Russia said

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© Valery Sharifulin/TASS

MOSCOW, January 25 /TASS/. McDonald’s will step up its development on franchise in Russia and is ready to hand over a considerable part of restaurants to local partners to step up the company’s expansion in Russian regions, Khamzat Khasbulatov, McDonald’s president in Russia, told TASS on Monday.

Until recently, the company preferred to develop independently in the Russian market. Local partners ran just a few restaurants under the McDonald’s brand. By comparison, 80%-90% of the McDonald’s chain develops on franchise in Western countries, Khasbulatov said.

"I think that if the number of franchise outlets amounts to 20% from the total number of Mcdonald’s restaurants in the next 3-5 years, it would be a good figure and a good starting point. This figure, however, is not our task or goal. We will continue opening restaurants and will concurrently attract additional partner resources," the top manager said.

It is vitally important for the company to establish cooperation, which will encourage the partners to open a huge number of restaurants in Russian regions, in which McDonald’s has an interest, Khasbulatov explained. According to him, this scheme will enable McDonald’s to use the partners’ financial abilities to expand the chain.

"Besides, it will give us an opportunity to optimize our administrative expenses. The fiscal component is also important: the corporation receives royalty [a payment for the use of its brand and format]; the partner receives dividends and the system on the whole - new volumes and opportunities," Khasbulatov said.

At present, McDonald’s is in talks with several potential partners and hopes to have a clear impression by the second half of 2016 with whom and according to what scheme it is going to cooperate, Khasbulatov stressed.

McDonald’s has been working in the Russian market for more than 25 years. It has 543 restaurants across Russia. In 2012, McDonald’s struck a deal with the Rosinter holdings that gives Rosinter the right to open McDonald’s restaurants at transportation hubs. Rosinter develops two such catering places and plans to open another 2 or 3 cafes in 2016, Khasbulatov reported. In 2015, McDonlad’s expanded a circle of his partners having signed an agreement with the OOO Gid company, which will be able to open restaurants under the McDonald’s sign in Novosibirsk and other Siberian cities.

In 2015, McDonald’s opened 59 of its own restaurants in Russia and plans to preserve this pace of enlargement in 2016. McDonald’s may invest almost 9 billion roubles (112.8 million U.S. dollars) in developing its business in Russia this year.

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