McDonald’s agrees to sell its stores in Russia and warns of $1bn exit loss
Fast food giant McDonald’s has agreed to sell its Russian stores across 45 regions – but warned it is likely to make a $1bn loss.
The chain announced it entered into an agreement with an existing licensee Alexander Govor, who has operated 25 restaurants in the eastern region of Siberia since 2015.
This comes after McDonald’s announced it was leaving the Russian market following the Kremlin’s war in Ukraine. It joined a host of other international companies to quit Moscow in protest, as the US, UK and EU slapped on hefty sanctions.
Al Jazeera reported that shuttering its stores in the country had costed McDonald’s $55m per month.
The BBC reported that more than 60,000 staff are to be retained in Russia for at least two years on existing pay, but the restaurants will lose their menu, logo and branding.
Govor agreed to fund the salaries of employees across 45 regions in the country, until they close, while McDonald’s warned investors it was likely to make a substantial by quitting the country.
McDonald’s had around 850 outlets in Russia – with the vast majority being run by local owners. Globally, 95 per cent of its nearly 40,000 stores are run locally.
McDonald’s first launched in Russia in the 1990s during the start of the collapse of the Soviet Union.
In a message announcing the move, its CEO Chris Kempczinski wrote to Russian employees, “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. “
“Let us not end by saying, “goodbye.” Instead, let us say as they do in Russian.. “until we meet again.””