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. Last Updated: 07/27/2016

Themed Restaurant Chains Are Catching On

For MTYolki Palki's first experiment with other culinary themes is its three-restaurant Mongolian barbecue style chain, Yolki Palki Po.
With competition intensifying on Moscow's restaurant market and diners enjoying a growing number of eating options, theme chains are becoming a more common sight around the city -- and a more reliable source of profit for those in the restaurant business.

In a report earlier this year, the U.S. foreign commercial service estimated Moscow has just over 4,000 eateries, compared with 14,000 in Paris and 17,000 in New York. There are some 30 fast food chains operating in the capital, it said.

The Vesta Center International restaurant group, which operates the Yakitoria, Gin-no Taki and Fudzi chains of Japanese eateries, along with the Crab House and the Sports Bar, plans to open more restaurants within its existing brands and may introduce new Japanese chains.

Vesta vice president Alexander Korolyov said that although Moscow's first Japanese restaurants were aimed mostly at the well-off, Vesta had quickly decided to sell the idea of Far Eastern cuisine to a wider sphere of Muscovites with the launch of Yakitoria four years ago.

"We started by opening Fudzi, in 1995, but then decided to open more accessible cafes," he said. "The average bill in Fudzi was $100 per head, but in Yakitoria it's $20 to $25 maximum. We kept the prices low to ensure a constant turnover of clients. We want to see people arriving at our restaurants not only in foreign cars, but also by bus."

Korolyov said Vesta plans to open two more Yakitoria restaurants before the end of this year, at Krylatskoye and Chertanovo, then another two in Moscow and two in St. Petersburg in 2003. Later it would like to introduce the chain to the regional cities of Perm and Kazan under franchise. But those will likely be the last Yakitorias to open before Vesta moves on to new projects, he said. He declined to specify what the new projects would be, but said he believes Moscow has plenty of room for fresh Far Eastern concept restaurants.

Ruslan Kochetkov / For MT

Alexander Korolyov of Vesta, which runs the Yakitoria, Gin-no Taki and Fudzi chains.

Vesta's latest Japanese theme chain, Gin-no Taki, consists of two branches in central Moscow, and Korolyov said more will appear in the capital and possibly in regional cities including Kemerovo and Omsk. Vesta operates the chain in Russia under franchise from its Japanese owners.

Korolyov estimated each Yakitoria serves about 500 diners daily, while each Gin-no Taki receives about 1,000 customers a day.

Yolki Palki is another chain eyeing expansion of its existing brand and considering launching a variety of themed restaurants within its group, according to general director Valery Konnov. The Yolki Palki chain, which opened its first outlet six years ago, now has 19 restaurants in Moscow and wants to advance beyond the capital and move into fast food.

"We plan to do the same as Rosinter by opening other brands under the Yolki Palki name," said Konnov.

"People don't want to eat the same thing all the time, so it's a good idea to have a variety of different restaurants."

Yolki Palki's first experiment with other themes was to open a Mongolian barbecue style chain, Yolki Palki Po, a brand that now includes three restaurants.The founder, Arkady Novikov, has a number of eating establishments to his name, including the more upscale Beloye Solntse Pustyni, Biskvit, Vanil and Tsarskaya Okhota. Konnov said the idea of launching a chain of affordable Russian theme restaurants came from the success of the upmarket Tsarskaya Okhota.

He said plans were afoot to set up Yolki Palki restaurants in provincial cities, with one outlet already under construction in Rostov-on-Don.

"We are also looking to open in St. Petersburg and Kazan, but it's important to find the right location in a city," he said.

Konnov said a key element of the chain's future strategy would be to enter the fast-food segment, but declined to give further details.

"The Moscow restaurant market is huge and very competitive, but now most development will be in the cheap, fast-food segment, where the average bill is below $5, as at the moment only McDonald's has a strong presence here. We also have plans for this niche."

Yolki Palki is concentrating increasingly on establishing new restaurants outside the city center in densely inhabited suburbs, where rent is lower and competition less intense. The most recent additions to the chain opened in Mitino on the northern outskirts of the city and Belyayevo in the south. Both opened in the last month.

"The costs of actually opening a restaurant in the center and further out are the same, but the rent is much higher in the center. So it's very difficult to open a successful restaurant downtown. We want 30 to 40 restaurants in the next three to four years, and have opened seven this year already," Konnov said.

He estimated Yolki Palki has 150,000 diners coming through its doors each month, and that this figure will grow with the market.

He said the average American eats out almost four times more often than the average Muscovite.

"This is a big gap, but it means there's huge potential for the market," he said. "Chains will tend to be more successful, because people know what they get."

Ruslan Kochetkov / For MT

Kish Mish's Alman inspecting the salad bar at one of the Uzbek chain's restaurants.

Kish Mish, an Uzbek theme chain also opened by Yolki Palki founder Novikov, started business two years ago and now has three restaurants in the center of Moscow and 270 staff.

General director Leonid Alman said Kish Mish would unveil a new restaurant at IKEA's shopping mall at Tyoply Stan in December, then open another new outlet on Leninsky Prospekt before the end of this year or early in 2003.

He said the group aims to have 10 restaurants within two or three years, and to keep most of them downtown.

"The problem in Moscow is finding the right building -- there is a lot of competition and restaurants are popping up all over the place," he said. "We don't want to go too far out of the center -- the most important thing is to find locations where there are plenty of passers-by and traffic."

Alman estimated the average diner spends about $15 at Kish Mish. The firm also offers delivery, but without a discount.

Taras Bulba Korchma, which serves traditional Ukrainian food in the same price range as Yolki Palki and Kish Mish, is another group that saw a niche in the market for a theme chain.

Now in its fifth year of business, Taras Bulba recently opened its sixth restaurant, at Baumanskaya metro. A Taras Bulba spokeswoman said the chain was interested in expanding to open new branches in Moscow, but knew of no current plans to move into the regions. She declined to give details of the chain's expansion strategy.

Like Konnov, she cited chain restaurants' best marketing device as the higher brand awareness afforded by simply having more outlets. One way she said Taras Bulba attracts more diners is by having staff in costume hand out flyers in the street and even to passing motorists stuck in traffic.

Along with Ukrainian food, Taras Bulba features Ukrainian decor and staff in traditional Ukrainian dress. The restaurants also offer a delivery service for orders of more than 500 rubles, with a 10 percent discount off the eat-in menu.