After 32 years, McDonald’s plans to sell its business in Russia.


After more than three decades in Russia, McDonald’s – an icon of American lifestyle and capitalism – is selling off its Russian business as it seeks to exit the country altogether.

The move is an important departure for a brand whose growth across the world has become the symbol of globalism and even the basis of a theory of peace. As globalist aspirations have fractured in recent years amid the coronavirus pandemic and geopolitical tensions, Russia’s invasion of Ukraine has forced many businesses that had hoped to operate normally into action.

Under increasing pressure from employees and consumers, many restaurant brands and chains have partially – or completely – suspended their operations in Russia. But few have left entirely due to concerns about employee well-being and difficulties reintegrating after a departure. McDonald’s announced in March that it would temporarily close its operations there, along with several other chains, including Starbucks and Yum Brands, the parent company of KFC and Pizza Hut. Many employees and activists pushed for a full retrenchment.

“This is an unprecedented, complicated issue with far-reaching consequences,” McDonald’s chief executive Chris Kempczinski wrote in a message to franchises, employees and suppliers obtained by The New York Times.

He added: “Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens is certainly the right thing to do. But it is impossible to ignore the humanitarian crisis caused by the war in Ukraine. And it is impossible to imagine that the Golden Arches represent the same hope and promise that led us to enter the Russian market 32 ​​years ago.

McDonald’s plans to sell its business to a local buyer. This will “de-brand” those restaurants, meaning they will no longer use the McDonald’s name, logo, or branding. McDonald’s said in a statement that its “priorities include ensuring that McDonald’s employees in Russia continue to be paid until the close of any transaction and that employees have future employment with any potential buyer.” It will keep its brands in Russia.

As a result of the decision, McDonald’s will record a write-off of $1.2 billion to $1.4 billion and recognize “currency translation losses,” the company said in the statement.

McDonald’s entry into Russia began at the 1976 Olympics in Montreal, Kempczinski wrote in his memo to franchisees, employees and suppliers, when the chain allowed the Russian Olympic team to use its Big Mac bus. Fourteen years later, in January 1990, McDonald’s opened its doors in Moscow.

“In McDonald’s history, this was one of the proudest and most exciting milestones,” Kempczinski wrote. “After nearly half a century of Cold War animosity, the image of the Golden Arches shining above Pushkin Square heralded for many on both sides of the Iron Curtain the beginning of a new era.”

McDonald’s, which has 39,000 restaurants in more than 100 countries, has since invested billions of dollars in its supply chain and restaurants in Russia.

“This was not an easy decision, and it will not be easy to execute given the size of our business and the current challenges of operating in Russia,” Kempczinski wrote. “But the end state is clear.”


Leave a Reply

Your email address will not be published.