McDonald’s To Sell Off Its Russian Restaurants

McDonald's To Sell Off Its Russian Restaurants

McDonald’s Is Closing Down Controversial Part Of Business

( – In the early 1990s, the former Soviet Union collapsed. As it did, the former communist state of Russia began embracing capitalism. Yet, before the collapse actually happened, the first McDonald’s opened in Moscow on January 31, 1990. It was a powerful symbol of the emerging changes sweeping past the Iron Curtain. Reports at the time said the excitement was so intense that McDonald’s patrons in Moscow kept their Big Mac boxes and drink containers to show off to their friends, families, and co-workers.

After Russia invaded Ukraine on February 24, McDonald’s temporarily closed its restaurants in Russia. Now, it says it will sell its business interests and pull out of the country over its continued aggression against Ukraine. On Monday, May 16, the company published a press release. The world’s largest fast-food chain said the business environment was no longer tenable or consistent with company values. In its place, Russia plans to brand a company that looks just like McDonald’s.

The Golden Arches Packs Up Shop

McDonald’s President and CEO Chris Kempczinski said he was exceptionally proud of the local franchise owners, 62,000 Russian employees who worked for the fast-food chain, and suppliers. He said their dedication made it a difficult decision to pull out of Russia, but the company had to hold true to its values. McDonald’s said Russian employees would continue to earn wages until the company sells the restaurants and employees have secured new job opportunities with a buyer of the company’s assets in Russia.

The massive company said it would write off approximately $1.2 to $1.4 billion due to the pullout. McDonald’s said any buyer would not use the McDonald’s brand name, logo, or menu. Yet, the company will maintain its trademarks in Russia.

In Ukraine, McDonald’s restaurants remain closed. Still, the company is paying the full salaries of Ukrainian employees and continues to support relief in local communities through the Ronald McDonald House Charities. Additionally, the company supports Ukrainian refugees across Europe through employment, housing, and food donations.

Russia Plans to Replace McDonald’s With Similar Branding

The Speaker of Russia’s lower house in Parliament recently said Russian companies should replace McDonald’s while reducing prices and preserving jobs. One company is already jumping into the fray and vying to take a bite out of Russia’s burger business industry. In a March 12 Russian trademark filing, Uncle Vanya’s said it would sport a yellow and red logo that closely resembles McDonald’s Golden Arches logo.

Uncle Vanya’s hasn’t opened yet, but it appears Russia plans to use it to replace the closed McDonald’s restaurants across the country.

Will Russians embrace the new burger joint?

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