McDonald's era in Russia coming to a close, restaurants sold
McDonald's era in Russia coming to a close, restaurants sold
McDonald's era in Russia coming to a close, restaurants sold
McDonald's is selling all of its restaurants in Russia 30 years after the burger chain became a powerful symbol of easing Cold War tensions between the United States and Soviet Union.
The company shuttered hundreds of locations in March after Russia invaded Ukraine, which has cost McDonald's about $55 million per month. On Monday, McDonald's announced it would sell those stores and leave Russia.
An existing McDonald's licensee, Alexander Govor, who operates 25 restaurants in Siberia, has agreed to buy McDonald's 850 Russian restaurants and operate them under a new name, the Chicago burger giant said Thursday.
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.
McDonald's was among the first Western consumer brands to enter Russia in 1990. Its large, gleaming store near Pushkin Square in Moscow, which opened shortly after the fall of the Berlin Wall, signaled a new era of optimism in the wake of the Cold War.
It's the first time the company has "de-arched," or exited a major market. It plans to start removing golden arches and other symbols and signs with the company's name. McDonald's said it will also will maintain its trademarks in Russia and take steps to enforce them if necessary.
The sale announced Thursday is subject to regulatory approval, but is expected to close within a few weeks, McDonald's said.
Govor, a licensee since 2015, has also agreed to retain McDonald's 62,000 Russian employees for at least two years on equivalent terms. Govor also agreed to pay the salaries of McDonald's corporate employees until the sale closes.
Govor is also half-owner of Neftekhimservis, a construction investor that owns an oil refinery in Siberia. He is also on the board of directors of Inrusinvest, whose projects include a medical center and a Park Inn hotel in the Siberian city of Novokuznetsk.
It's unclear if other U.S. chains will follow McDonald's lead and leave Russia. McDonald's owned 84% of its Russian stores, which gave it more control over operations than many of its rivals whose stores are owned by franchisees.
Starbucks' 130 Russian stores have been closed since early March. Its franchisee in the country, Kuwait-based Alshaya Group, is continuing to pay its 2,000 Russian employees.
Papa John's suspended corporate operations in Russia and is no longer accepting royalty payments from its 185 stores there. But the stores, which are owned by Colorado-based entrepreneur Christopher Wynne, remain open. A message was left Thursday with one of Wynne's companies.
McDonald's left open the possibility that it could one day return to Russia.
"It's impossible to predict what the future may hold, but I choose to end my message with the same spirit that brought McDonald's to Russia in the first place: hope," CEO Chris Kempczinski wrote in a letter to employees. "Thus, let us not end by saying, `goodbye.' Instead, let us say as they do in Russian: Until we meet again."
Prices have been easing slightly recently, but affording a mortgage is still a very difficult task for many Canadians. How much of a mortgage can you afford? Contributor Christopher Liew breaks it down in an exclusive column for CTVNews.ca.
The Bank of Canada's strategy of rapidly increasing its key interest rate in an effort to tackle skyrocketing inflation will likely trigger a recession, says a new study released Tuesday from the Canadian Centre for Policy Alternatives.
Even though it may seem years away, saving for retirement is a top priority among 26 per cent of Canadians aged 18 to 34, a recent survey from the Healthcare of Ontario Pension Plan found. However, 79 per cent of respondents in that age group say saving for retirement is prohibitively expensive.
A new report says Canada should replace its "haphazard and unpredictable" approach to minimum wages across the country with a clear formula based on average incomes.
The Canada Day long weekend saw gas prices plummet in parts of the country, but the relief at the pumps may not stay for very long, analysts say. The decreases come after crude oil prices slid in June following the U.S. Federal Reserve's interest rate hikes, sparking fears of a recession.
As stocks continue to slump, it can be easy to let your emotions take over if you've got money invested in the market. But experts agree that there's no need to panic if you're invested in the right type of portfolio with the right level of risk.
With increasing rent prices likely to be the reality for many Canadian tenants, some may be wondering how to navigate rising costs, or whether any course of action can be taken, if any. Legal experts across the country share their advice on how to handle a rent hike.
