Yum Brands Plans KFC Outlets Spree in Turkey on Growth Potential

Yum! Brands Inc., the fast-food company that owns KFC, Pizza Hut and Taco Bell, plans to increase its KFC restaurants four-fold in Turkey to tap fast-food dining growth beating the nation’s economic expansion.

The Louisville, Kentucky-based company plans to add 400 KFC restaurants in Turkey over the next five years, said Sabir Sami, head of Turkey, Middle East, North Africa and Pakistan for Yum! Brands, at a news conference in Istanbul on Thursday.

The company, which took over Turkey operations in 2013 from a local franchise group and currently owns 99 of the 100 existing KFC outlets in the country, will probably run half of the new restaurants while the remainder will be operated through franchise deals, Sami said.

Turkey’s dining industry, which includes fast-food chains McDonald’s Corp., Burger King Worldwide Inc. and Shake Shack as well as high-end outlets such as Cipriani and P.F. Chang’s, grows between 2 percent to 3 percent every year.

“Of those 400 new restaurants, we are planning to open 250 or 300 of them in Anatolia because of the huge fast-food growth potential in Anatolian cities,” Sami said, referring to mainland Turkey. The remainder will be opened in Istanbul, he said.

KFC’s sales are expected to grow more than 10 percent annually in Turkey, making the country the second-biggest growth market after Russia, Sami said. Fast food’s share in the total dining industry has expanded to 50 percent in the past five years from 30 percent, he said. KFC buys most of its chicken from Banvit, a local producer in Turkey.

Each KFC restaurant will cost between 700,000 liras ($251,000) and 1.5 million liras, Sami said, implying a total investment cost of between 280 million liras and 600 million liras for Yum! Brands and its franchise partners.

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