McDonald’s is selling its business in Russia because of the Ukraine war.
The fast-food giant has operated in Russia for 30 years, but closed all of its 850 outlets in the country in March, shortly after the invasion started.
The multinational said that continuing to operate in Russia would be inconsistent with its “values”. The unpredictable operating environment makes it untenable, the company said.
The chain, which has been criticised for poor labour and environmental practices throughout its history, announced its intention to “de-arch” its restaurants in the region, before selling them to a local buyer. “De-arched” restaurants will no longer be able to use the company’s name, logo, branding and menu.
The first McDonald’s in Russia opened in January 1990 in Pushkin Square, Moscow. Its opening was greeted by thousands of customers and a media scrum and was seen as a symbol of a new era after the fall of the Soviet Union. McDonald’s became a symbol of globalisation and optimism following the Cold War. In 1996 American political commentator Thomas Friedman coined the “McDonald’s theory of war”, which suggested that no two countries that had branches of the burger chain would ever go to war.
McDonald's President and Chief Executive Officer, Chris Kempczinski, said, “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 today's announcement extremely difficult. 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.”
Global brands have ceased to operate in the breakaway regions in the east of Ukraine due to sanctions following Russia’s annexation of Crimea in 2014. DonMak is a burger chain in the Donetsk People’s Republic which was opened in abandoned branches of McDonald’s, using left behind equipment. Other such brands include Crimean Fried Chicken, Starducks. DonMak.
The company expects to record a non-cash charge of $1.2 billion (£1 billion) as a result of its exit from Russia.