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BDS Ukraine Business Development Solutions November 2012 Restaurant business development Market Scan Report.

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Presentation on theme: "BDS Ukraine Business Development Solutions November 2012 Restaurant business development Market Scan Report."— Presentation transcript:

1 BDS Ukraine Business Development Solutions November 2012 Restaurant business development Market Scan Report

2 I. Fast food market in Ukraine II. Premises for FF restaurants: General information III.Available and recommended Locations: commercial centers IV. Available Locations: buildings V. Business for a foreign investor: recommendations for start VI.Restaurant business in Ukraine: first steps VII. Restaurant with Spanish cuisine AGENDA

3 Currently Burger King restaurants are not present in Ukraine. However the company registered its logotypes in Ukraine on September 26 th, 2012 while the request was given on October 15 th, 2010*. The following was registered: Burger King ("Бургер Кинг), Do it your way ("зробы по-своему), Home of the Whopper (Дом Воппера) and ВК. *According to the government organization Ukrainian Institute of industrial property. I. FAST FOOD MARKET IN UKRAINE: GENERAL SITUATION

4 Fast food market in Ukraine is not competitive yet and experts admit that it grows faster than European FF market. At this moment only McDonald`s и Domino`s Pizza have strong positions on the local market and they compete with local FF brands. McDonalds has 72 restaurants in 22 cities of Ukraine with 70 mln. customers annually. KFC (Kentucky Fried Chicken) are registering in Ukraine now, the network of the restaurants must be opened already this year in a new Commercial Center Ocean Plaza. I. FAST FOOD MARKET IN UKRAINE: GENERAL SITUATION

5 FF market capacity is now around mln USD annually. It is growing every year by 15-20%. Market is occupied now by 40%, which proves that there is a good potential for new players. I. FAST FOOD MARKET IN UKRAINE: GENERAL SITUATION

6 To start a FF restaurant requires on average USD investment (excluding cost of franchise) in case of rent and usd and more for purchasing and reconstruction the premises ready for restaurant business. Additionally from to USD annually is required for its promotion. However due to big turnover the initial investments are quickly returned – within 2-4 years as the profit of such business is from to usd per month NET (according to the experience of current successful trademarks). The market will start growing much faster as of I. FAST FOOD MARKET IN UKRAINE: FINANCE ESTIMATIONS

7 General information II. PREMISES FOR FF RESTAURANTS

8 II. PREMISES FOR FF RESTAURANTS: GENERAL INFORMATION There is a shortage of suitable premises or lands for new building constructions. Process of land acquisition is 3 times longer than in Europe That is why FF restaurants are mostly placed in commercial centers. However many FF networks are not satisfied with placement in commercial centers as number of visitors declared by the commercial centers is smaller than in reality, which is reflected on the profit of business.

9 II. PREMISES FOR FF RESTAURANTS: GENERAL INFORMATION It is not yet popular to open FF restaurants in the non-central areas: lack of customers, which leads to short profit. The only brands available there are McDonald's and Shvydko (local FF net).

10 Commercial Centers III. AVAILABLE AND RECOMMENDED LOCATIONS

11 COMMERCIAL CENTERS FOR THE FAST FOOD RESTAURANT Ocean Plaza Brand new commercial center opened on Nov 20 th, КFC will be opened in the center very soon. Cost of rent: 55 USD per m2 Utilities (incl. electricity&water) 10 USD per m2 Marketing: 4 USD per m2 Total: 69 USD per m2 (net)

12 COMMERCIAL CENTERS FOR THE FAST FOOD RESTAURANT Promenada center Rent square: 150 m2, 45 m2 kitchen,105 m2 for seats Rent cost: 30usd per м2 Utilities: 12 usd м2 Total cost: 42 usd per m2 (net)

13 COMMERCIAL CENTERS FOR THE FAST FOOD RESTAURANT Metrograd Underground shopping center, central location. Rent square – 110 m2 Cost of rent – 37 usd per m2 Utilities – 10 usd Total – 47 usd (gross)

14 COMMERCIAL CENTERS FOR THE FAST FOOD RESTAURANT Magellan Non-central shopping center placed in a highly populated area. Rent square – 118 m2 (for kitchen and seats) Cost of rent – 30 usd per m2 Utilities – 10 usd (plus electricity supply meters results monthly) Total – 47 usd (gross)

15 Buildings IV. AVAILABLE LOCATIONS

16 Area close to city center 170/1b Horkogo Str., 480 м2. Ground floor, basement, sun porch Available documents for catering usage (Aкт ввода в эксплуатацию под предприятие общественного питания) What is near: Lybidska metro station, Fourshet, Silpo, Ocean Plaza - new Commercial Center. Planned customers capacity -150 seats. Sale price – USD (1791 USD per м2) Rent –8 640 USD (18 usd per м2) IV. AVAILABLE LOCATIONS: #1

17 Sale of land and architectural project for construction of restaurant/store Location – non central (Left bank of Kyiv), but well populated Square for building м 2 Land – 3 hundred м 2 Project of facade 3floors building, not far from Pozniaki metro station, opposite Alladin commercial center. Possibility to organize parking area. Sale: USD IV. AVAILABLE LOCATIONS: #2 (NON- CENTRAL AREA)

18 A fully supplied and working restaurant ready to be rented, currently named Shtany. Very central location. 11 Pushkinska Str. (In the yard), 131 м2.(50 seats) Ground floor. Available documents for catering usage What is near: Khreshatyk Street, Russian Drama Theater Rent price - to be negotiated with owners if you are interested in the location. IV. AVAILABLE LOCATIONS: #3 (CITY CENTER) Bohdana Khmelnytskogo street, one block from Khreshatik

19 Recommendations for start V. BUSINESS FOR A FOREIGN INVESTOR

20 The most typical way for a foreigner to start business in Ukraine is to become a founder of a Ukrainian company with foreign investments (may be up to 100% foreign investment). Next step is to appoint a Ukrainian director, whose responsibilities and decision power can be limited depending from the desire of the foreign founder to control the business. The director should be responsible for relationships with all authorities in order to get necessary permissions to start the business. V. BUSINESS FOR A FOREIGN INVESTOR

21 First steps VI. RESTAURANT BUSINESS IN UKRAINE

22 Step 1: creation of architectural project of the premises that stipulates all equipment placement, water and electricity supplies, etc. The document should be ordered to a Ukrainian architect according to the local standards to be approved by local authorities. Cost of the architectural project is around USD. VI. STARTING RESTAURANT BUSINESS

23 Step 2: getting necessary approvals of authorities. We should consider official and non-official expenses. Official: Handel patent for trade activity – (depends from area) 7 to 40 USD License for retail of alcohol USD License for retail of tobacco goods – 110 USD Full list of official payments should be discussed with a lower for precise business planning. Non-official payments (may be more or less depending on different factors): sanitary station – about USD fire security – about USD VI. STARTING RESTAURANT BUSINESS

24 General recommendations VII. RESTAURANT WITH SPANISH CUISINE

25 There is a number of restaurants that include Spanish meals together with Mexican, American and so on. However there is no any restaurant yet with specifically Spanish cuisine. We believe that typical home restaurant that we often meet in any Spanish city or town made from the heart may stand out among many Ukrainian restaurants. VII. RESTAURANT WITH SPANISH CUISINE

26 … please contact us: Oksana Samoylenko BDS Ukraine Executive Director Mob: ( ) for the next steps…


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