McDonald’s announced on Monday that it has begun the process of selling its Russian business, which includes 850 restaurants employing 62,000 people, making it the last major Western corporation to leave Russia after invading Ukraine in February.
The fast-food giant cited the humanitarian crisis caused by the war, saying keeping its business in Russia “is no longer sustainable or in line 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 its employees. On Monday, she said she would seek to get a Russian buyer to hire these workers and pay them until the sale is completed. He did not identify a prospective buyer.
CEO Chris Kempczynski said McDonald’s “commitment and loyalty” to employees and hundreds of Russian suppliers made it difficult to leave.
“However, we have a commitment to our global community and we must remain steadfast in our values,” Kempczynski said in a statement, “and our commitment to our values means we can no longer keep the arches shining there.”
As it tries to sell its restaurants, McDonald’s said it plans to begin removing gold arches and other symbols and signs with the company’s name. He said he would keep his brands in Russia.
“It was the best of a series of difficult choices,” said James O’Rourke, a professor of management at the University of Notre Dame’s College of Business in Mendoza. Under this agreement, Russian McDonald’s employees will have a stable future for employment, ordinary citizens will have a well-known place in the sandwich and soft drink neighborhood, and by “removing” 850 stores in Russia, McDonald’s Corporation will protect the brand and to recoup at least part of its capital investment. ”
Russia’s first McDonald’s 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 the Soviet Union.
McDonald’s is the first American fast food restaurant to open in the Soviet Union, which will collapse in 1991.
How effective are sanctions against Russia? 04:26
McDonald’s decision to leave comes as other US food and beverage giants, including Coca-Cola, Pepsi and Starbucks, have suspended or closed operations in Russia due to Western sanctions.
Corporations from British energy giants Shell and BP to French carmaker Renault have withdrawn from Russia, hurting their final results as they seek to sell their assets there. Other companies have remained at least partially, with some facing a backlash.
On Monday, Renault gave its Russian assets to the Kremlin, both sides said, “marking the first major nationalization since the start of sanctions over Moscow’s military campaign in Ukraine,” AFP reported.
McDonald’s said it expects to file charges of earning between $ 1.2 billion and $ 1.4 billion when it leaves Russia.
Its restaurants in Ukraine have closed, but the company said it continues to pay full salaries to its employees there.
McDonald’s has more than 39,000 seats in more than 100 countries. Most are owned by franchisees – only about 5% are owned and operated by the company.
McDonald’s said leaving Russia will not change its forecast for adding a net 1,300 restaurants this year, which will contribute about 1.5% to sales growth across the company.
Last month, McDonald’s said it earned $ 1.1 billion in the first quarter, down from more than $ 1.5 billion a year earlier. Revenue was nearly $ 5.7 billion.
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