Response to Ukraine war
Burger King wants to close branches in Russia – but that’s not so easy
Burger King wants to go out of business in Russia
© Gerald Matzka / dpa central image / dpa-infocom GmbH
Because of the war against Ukraine, McDonald’s had already announced that it would close its Russian branches. Competitor Burger King also wants to do the same, but the Russian franchise partner is stuck.
Burger King is also reacting to the war in Ukraine. In protest about Russia’s attack on the neighboring country, the parent company wants to close its branches in Russia and give up its business there completely. However, this project is proving to be extremely difficult to implement.
Because of the franchise partners there, the plan will be a difficult undertaking, said Restaurant Brands International (RBI). The withdrawal from the country is planned, but will take some time.
“Would we like to suspend all Burger King activities in Russia immediately? Yes,” CEO David Shear wrote in an open letter. “Can we enforce a stoppage today? No.” The reason that the approximately 800 branches remained open is said to be the franchise partners controlled by businessman Alexander Kolobov. RBI only holds 15 percent of the joint venture in Russia.
Burger King’s mother no longer supports the branches in Russia
However, the group has stopped supporting the branch network and is no longer investing in Russia itself. Doing the business is difficult because of the contracts and will probably require the approval of the Russian authorities. This is not to be expected quickly. The exit is a complicated legal process that is likely to drag on, according to RBI boss Shear.
Burger King’s rival McDonald’s announced last week that it would close its around 850 fast food restaurants in Russia. In Germany, Burger King’s partner Kolobov is still remembered for conflicts about alleged hygiene deficiencies and poor working conditions. In 2014, the chain had therefore terminated his license. It was later agreed that the 84 branches in Germany controlled by his company would continue to operate.
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