By Hilary Russ
NEW YORK (Reuters) – Yum Brands Inc , parent company of fried chicken chain KFC, is pausing investment in Russia, a key market that helped the brand achieve record development last year, the company said.
However, Yum did not comment on whether it would seek to limit or pause current restaurant operations in Russia after the country’s invasion of Ukraine.
Yum, which has at least 1,000 KFC locations and 50 Pizza Hut locations in Russia that are nearly all independent franchisees, said in a post on its website dated Monday that it had “suspended all investment and restaurant development in Russia while we continue to assess additional options.”
The restaurants are owned and operated independently through franchise agreements, meaning Yum does not have as much control as if it ran them itself but also has less exposure to financial and operational risks.
Last year was a record year of development for KFC, led by new restaurants opening in China, India and Russia, executives said during an earnings call on Feb. 9.
Overall, KFC international opened more than 2,400 gross units in 2021. In Russia, the company was opening about 100 new restaurants annually and had expected to continue a “a similar expansion strategy going forward.”
Many companies have begun to pull their business out of Russia amid sanctions and outrage over the invasion of Ukraine. Calls for more companies to follow suit are growing.
On Friday, the chief of New York state’s pension fund penned letters to McDonald’s Corp, PepsiCo Inc and eight other companies urging them to consider pausing operations in Russia.
(Editing by Mark Porter)