McDonald’s Corporation to Sell its Russian Business


CHICAGO — On the heels of pausing operations in March, McDonald’s Corporation has initiated the process to exit the Russian market sell its business due to the ongoing humanitarian crisis caused by the war in Ukraine.

The company has started the process of “de-Arching” those restaurants in Russia, which entails no longer using the McDonald’s name, logo, branding and menu, though the company will continue to retain its trademarks in Russia. Additionally, McDonald’s will ensure employees continue to be paid until the close of any transaction and that they have future employment with any potential buyer.

In fact, McDonald’s recently entered into a sales and purchase agreement with its existing licensee Alexander Govor. Under this agreement, Govor will acquire McDonald’s entire restaurant portfolio and operate the restaurants under a new brand. The transaction is expected to close in the coming weeks. The buyer has also agreed to fund the salaries of corporate employees who work in 45 regions of the country until closing, as well as fund existing liabilities to suppliers, landlords and utilities. 

“We have a long history of establishing deep, local roots wherever the Arches shine. We’re exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business and our local franchisees. Their dedication and loyalty to McDonald’s make [this] announcement extremely difficult,” says Chris Kempczinski, president and CEO, McDonald’s Corporation. “However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there.”

In Ukraine, McDonald’s restaurants remain closed while the company continues to pay full salaries for its employees and support local relief efforts led by Ronald McDonald House Charities.

“The fast-food giant has clearly recognized the impact that continued affiliations with Russia could have on the company. With 72 per cent of consumer purchases globally driven by a brand’s ethics or support shown toward a social cause, McDonald’s has shown dedication to balance consumer expectations and their operational needs,” says Ramsey Baghdadi, consumer analyst at GlobalData, based on findings from the 2022 Q1 Global Consumer Survey. “The new challenge for McDonald’s will be to seek other markets to focus on to replace its Russian income. McDonald’s should take advantage of its presence in other markets such as Japan and France, where the company continues to grow rapidly, and expand its outlets in Asia and Europe.”

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