Burger King to Expand Presence in Russia

Burger King Worldwide Holdings Inc. formed a joint venture with its largest franchisee in Russia, Burger Rus, and the Russian investment bank VTB Capital as it looks to gain market share in Russia's fast-growing quick-service restaurant sector.

Burger King, the world's second-largest fast-food chain behind McDonald's, had struggled to attract customers, due in part to its lack of menu development and flawed pricing. But the hamburger chain has been gaining ground as the company reworked its menu, restaurant appearance and advertising in preparation of going public this summer.

Burger King said Burger Rus, the largest Burger King franchisee in Russia, has opened 54 Burger King restaurants in Russia over the last 30 months, and it and VTB Capital have committed to opening several hundred restaurants over the next few years.

Under the long-term master franchise and development agreement, the newly formed Russian joint venture has exclusive rights to expand the Burger King brand in Russia.

Financial terms weren't disclosed.

Burger King was taken private in 2010 by the New York-based private-equity firm 3G Capital Management through a deal valued at $4 billion. The company in April reached a $1.4 billion cash deal with U.K. investment vehicle Justice Holdings Ltd. (JUSH.LN) that would bring the fast-food chain back to the public market. 3G Capital will remain Burger King's principal shareholder with a 71% stake in the public company.

Last month, Burger King reported it swung to a first-quarter profit as revenue jumped 3.2% with the help of strong North America sales.

Write to Melodie Warner at [e-mail]