August 10, 2010 / 11:53 AM / 9 years ago

Wendy's/Arby's plans 180 restaurants in Russia

NEW YORK (Reuters) - Wendy’s/Arby’s Group Inc WEN.N said it plans to open 180 restaurants in Russia over the next 10 years, becoming the latest U.S. fast food chain to look to that market for growth.

The company has announced several deals in the past 15 months that reflect its intention to aggressively expand abroad, including a plan announced in June to open 100 Arby’s restaurants in Turkey in the next decade.

Compared to rivals such as McDonald’s Corp (MCD.N) and KFC parent Yum Brands Inc (YUM.N), Wendy’s/Arby’s has a modest international presence, with only about 300 of its 10,000 restaurants located outside North America.

The company will open the Russian restaurants with local franchisee Wenrus Restaurant Group Ltd. Wenrus is an affiliate of Russia’s Food Service Capital, which runs 28 restaurants in Russia, Ukraine and Britain, including Goodman Steak Houses.

Wendy’s/Arby’s Chief Executive Roland Smith said in a statement on Tuesday that Russia “offers significant long-term expansion potential” and that the company chose Wenrus because of its knowledge of Russia’s food service market.

The Russian restaurants will be dual-branded, meaning they will offer food from both chains’ menus, such as hamburgers and roast beef sandwiches.

The first restaurant will be in the Moscow area and is set to open sometime in 2011, a company spokesman told Reuters.

In addition to the Russian and Turkish deals, the company last year announced plans to open restaurants in Singapore, the Middle East and North Africa in hopes of capturing the growth that international sales have given its rivals.

In May, Wendy’s/Arby’s reported a narrower first-quarter loss as a slight increase in Wendy’s North America same-restaurant sales mitigated some of the 11.5 percent drop in same-restaurant sales at Arby’s restaurants.

Wendy’s/Arby’s is set to report second-quarter results on Thursday.

McDonald’s, which on Monday reported strong July sales in part because of robust business overseas, opened its first Russian restaurant in 1990 and now has 240 restaurants there.

Russia is McDonald’s fastest growing market, accounting for around 4 percent of global sales. McDonald’s has about a 70 percent share of Russia’s quick-service restaurant market.

In January, Burger King BKC.N and its Russian franchisee, Burger Rus LLC, opened that chain’s first Russian restaurant. They plan to open at least five Burger King restaurants in Moscow within two years.

Wendy’s/Arby’s Chairman Nelson Peltz, the chain’s largest shareholder, said in June that an unnamed party had expressed interest in a potential deal, raising speculation that the chain could be the target of a potential takeover.

The company’s shares were down 8 cents, or 1.8 percent, to $4.36 in late-morning trading on the New York Stock Exchange.

Reporting by Phil Wahba; Editing by Derek Caney and John Wallace

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