McDonald's Finds Buyer for Russian Restaurants

One of its licensees will acquire them, keep them open under a different name
By Newser Editors and Wire Services
Posted May 16, 2022 6:50 AM CDT
Updated May 19, 2022 1:18 PM CDT
McDonald's: Our Restaurants in Russia 'No Longer Tenable'
The oldest of Moscow's McDonald's outlets, which was opened on Jan. 31, 1990, is closed on Aug. 21, 2014.   (AP Photo/FILE)

(Newser) Update: McDonald's has a buyer for all its restaurants in Russia. An existing McDonald's licensee, Alexander Govor, who operates 25 restaurants in Siberia, has agreed to buy the chain's 850 Russian restaurants and operate them under a new name, per the AP. McDonald’s did not disclose the terms of the sale. Last year, McDonald's Russian operations contributed 9% of the company's total annual sales, or around $2 billion. The chain, however, is pulling out over the invasion of Ukraine. Our original story from May 16 follows:

McDonald's said Monday that it has started the process of selling its Russian business, which includes 850 restaurants that employ 62,000 people, making it the latest major Western corporation to exit Russia since it invaded Ukraine in February. The fast-food giant pointed to the humanitarian crisis caused by the war, saying holding on to its business in Russia "is no longer tenable, nor is it consistent with McDonald's values." The Chicago-based company announced in early March that it was temporarily closing its stores in Russia but would continue to pay employees. On Monday, it said it would seek to have a Russian buyer hire those workers and pay them until the sale closes, per the AP. It didn't identify a prospective buyer.

CEO Chris Kempczinski said the "dedication and loyalty to McDonald's" of employees and hundreds of Russian suppliers made it a difficult decision to leave. "However, we have a commitment to our global community and must remain steadfast in our values," Kempczinski said in a statement. "And our commitment to our values means that we can no longer keep the arches shining there." As it tries to sell its restaurants, McDonald's said it plans to start removing golden arches and other symbols and signs with the company's name. It said it will keep its trademarks in Russia.

The first McDonald's in Russia opened in the middle of Moscow more than three decades ago, shortly after the fall of the Berlin Wall. It was a powerful symbol of the easing of Cold War tensions between the United States and Soviet Union. McDonald's was the first American fast-food restaurant to open in the Soviet Union, which would collapse in 1991. The company's decision to leave comes as other American food and beverage giants, including Coca-Cola, Pepsi, and Starbucks, have paused or closed operations in Russia in the face of Western sanctions. McDonald's said it expects to record a charge against earnings of between $1.2 billion and $1.4 billion over leaving Russia. Its restaurants in Ukraine are closed, but the company said it's continuing to pay full salaries for its employees there.

(Read more McDonald's stories.)

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