Russia: Franchise Restaurants Doing Well Despite Slowing Economy

The Russian food service sector has faced a number of serious challenges during the past year. A smoke ban in restaurants and bars went into effect on June 1, 2014, which has hurt the growing café culture as well as many bars and pubs. Shortly afterwards, in August 2014, Russia banned a long list of food and agricultural products from Australia, Canada, Norway, the United States and the European Union for one year in response to Western sanctions. In addition, the Russian currency depreciated significantly pushing up food price inflation while dropping consumer purchasing power. Nevertheless, the total number of franchises in Russia has seen double digit growth in the last few years - and growth is expected to continue as lower cost restaurants are expected to do well during the current economic slowdown. American fast food formats dominate the landscape in Russia.

Russia: Franchise Restaurants Doing Well Despite Slowing Economy