Fast Food Business in Russia

So you want to start a business in Russia, but you do not know what kind, except you're interested in food, of the fast variety. But what's popular in Russia and what is not? What is lacking in this market of 150 million people and growing?

In this article, we will go over the various categories and what is available as an opportunity. This will be first and foremost tilted towards those coming from the US, as the Americans seem to be the epicenter of fast food. But Asian and European entrepreneurs could do very well here if they're sufficiently capitalized to not need to borrow from any Russian bank and move quickly into some wide-open market niches. Read on to find out what we think those are...

See also:

Buying a Small Business in Russia: Novosibirsk Restaurant Case Study

Standard Fare with Full Market Penetration, Which in Our Opinion Foreign Entrepreneurs Should Avoid: Burgers and Hotdogs

First, let's begin with what foreign entrepreneurs probably shouldn't try to do: reinvent the burger, which is like reinventing the wheel but for fast food. This category is dominated by two US giants and several regional Russian competitors.

The first McDonalds to ever open in Russia on Moscow's Pushkin Square (now Vkusno i Tochka, or "tasty, period") is now owned by a Russian oligarch. That's because McDonalds sold all 700+ of its restaurants in Russia, back in 2023. What's interesting is that in the sales contract, McDonalds retained the right to buy back all of its franchise restaurants at any time during the first 18 years after the sale. Former Fox News show host turned independent commentator Tucker Carlson gave Vkusno i Tochka burgers and fries a try when he famously came to Moscow over a year ago. The fact that Starbucks recently renewed their trademarks in Russia suggests that they, along with the Golden Arches, will be back, even if in a few years they'll find their competition far stronger than today and vastly different than when the franchise first entered the late USSR market in 1990.

Vkusno i Tochka's biggest competitor is of course Burger King, which remained in Russia after the SMO and is doing quite well. Besides these two chains, there are several regional chains such as Miratorg Burgers, McBurger and others. It's hard to make an apples to apples comparison between these regional chains and US burger chains that have gone nationwide such as 5Guys, Shake Shack, or In and Out. On top of this, almost every small Russian restaurant serves burgers and fries. The market is very saturated. Take it from our personal experience briefly running a restaurant in the Moscow suburbs.

Wendy’s briefly came into the Russian market, but with only two sales points, both being located at either end of the Old Arbat tourist street in Moscow. They haven't done anything to expand. Additionally, Hardies came in with a few stores, one is located in Crocus City, yes the same mall that suffered a terrorist attack last spring. The restaurant was or is located in a different part of the giant complex from where the terrorists struck.

Hotdogs are ruled by Stardog, the biggest chain of hotdog sellers in Russia. These can literally be found everywhere, as they usually have small booths setup and in portable establishments, as well in as in almost every mall and market. Other chains also sell hotdogs, but no chain comes close to the Stardog brand.

Pizza

Another very well if not over represented category. Not only do most restaurants have pizza on the menu, there are half dozen major franchises. Amongst these are the US standards: Dominos, Papa Johns and Pizza Hut, though the last is very low quality in Russia. Then there are two Russian giants: Dodo Pizza and Sergio’s Pizza. Both are very large franchises covering much of Russia. Regionalized and local franchise like Pizza Express also exist, though in the latter’s case, this is a very low quality brand.

Sushi

Raw fish is not what most Americans could consider fast food. In America, Chinese food with the exception of hot pot and dim sum is often considered fast food (more on this opportunity later), but Japanese is considered more upscale. Such logic makes sushi “upscale”, even if it comes from a supermarket or even a gas station "chef". Not so here in Eastern Europe, particularly Russia. Sushi is everywhere, be it at dedicated Sushi spots, Sushi from some grocery store or pizza-sushi joints, like Sergio’s Pizza. This market is jam-packed, so foreign food entrepreneurs are advised to look elsewhere.

Partial Market Penetration With Room for a Foreign Resident Franchisee to Enter the Market

Doner Kebab (Germanicized Turkish pita meat sandwiches) and Curry Wurst

Our editor inserted this one, with the video above of our friend Joseph Rose the Expat American speaking with a German entrepreneur who opened a curry wurst food stand in Moscow, which became an immediate hit. In Joe Rose's video, the German owner already within days had Russian businessmen knocking on his food stand window asking if he'd be interested in selling curry wursts to stadium goers at sporting events or even franchising the business. An anecdotal success story perhaps, but one that's backed by the demographic trend of more Germans moving to Russia in the coming years influencing local tastes.

Fried Chicken

There is only one major franchise in Russia in this sector: KFC (also known as Rostic's). While KFC is everywhere, there is a serious lack of competition and taste differentiation. Chains like Bojangles or even Buffalo Wild Wings could do well in Russia. Christian pro-family chains such as Chick-fil-A would also be very accepted. Greasy chicken, such as Church's or Popeyes, would find it harder to breakthrough, as very greasy food is not popular.

Sandwiches: Italian subs, Paninis, or Banh Mi

The only major sandwich made to order joints are all Subways, and while they are, can be found in most western Russian cities, they still do not have a massive footprint. No other sandwich made-to-order restaurants are in the Russian market sphere. This is a very large opening, especially for entrepreneurs who can bring high quality suppliers of meats for making banh mi Vietnamese sandwhiches as well as "Russian Italian" cheeses for subs to the table.

Chinese/Fast Casual Asian

Chinese, Japanese, Korean and even Thai food in Russia is almost exclusively seen in upscale eateries. Though there are have been some chains of fast food such as Panda Express for Chinese or PhoBo for Vietnamese, these are hardly found outside of some food courts in large shopping centers.

The concept of a cheap Chinese buffet with a large selection of different dishes, or Korean and Mongolian barbecue grills, remains totally unheard of in Russia. So are fast noodle or Chinese-Vietnamese fusion noodle soup (Pho) chains, which could do well here. This is a market niche that is fully open for exploitation that may do quite well, especially with an enterprising Chinese, Korean or Vietnamese businessman who can find excellent Russian partners.

Zero Market Penetration:

Probably Hasn't Been Effectively Tried in Russia For Good Reason

Tex-Mex

Back in the roaring gangster Nineties, Taco Bell tried to enter the Russian market. They did this in the worst possible form that could be imagined. Considering back in 1993 and still much so today, this type of food has been little known in Russia, so the market growth possibilities are great. Taco Bell chose to set up a stand in the Moscow Metro at one spot and sell refried bean burritos. Considering Taco Bell's entire menu, this is the portion that was least likely to be eaten by Russians, who might've warmed to tacos instead. They failed miserably and their parent company Yum brands exited the Russian market in 2023.

Fish and Chips

While Russians like fish, fried fish and french-fries aka pommes frites, for some reason, fast casual fish places, such as Long John Silver’s are fully absent from the market. With so many varieties of wild-caught as well as farm-raised fish in Russia, fried fish has been a much-favored dish for centuries. But any fast food version seems to be missing. Maybe there's an enterprising immigrant Englishman who can take on this challenge.

A Teremok location in a Russian mall food court (photo from: New-Retail.ru)

Successful Russia-specific Fast Casual Chains for Comparison

Two very popular chains in Russia are Kroshka Kartoshka (dear potato) that serves baked potatoes with fillings to order and Teremok (little village house) that first and foremost serves blini (crepes) with various fillings from salmon to berries, as well as other Russian dishes.

Other fast food favorites in Russia are pelmeni (Russian dumplings made with beef or pork), Caucasian-style shashlik (for Turkish-style shish-kebab, see the Doner Kebab video above), Armenian ganash salads, Georgian Khachapuri (very rich often goat cheese-filled bread), and Arab shawarmas.

What a Russian food court pancake from Teremok looks like...

For coffee and croissants, the former Starbucks locations in Russia have been re-branded as Stars Coffee, with a nearly identical logo. Many Ukrainian media outlets were displeased with the news last month that the Seattle-based chain had renewed its Russian trademarks and thus, could be weighing a comeback in the Russian market.

Hopefully, this article will assist future food entrepreneurs in exploiting the major market opportunities still available in Russia.

If you're looking to relocate to Russia and establish yourself here as a fast casual dining entrepreneur, reach out to me via email Stanislav@ExitStrategy.world.