April 21, 2024

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McDonald’s sells its business in Russia after 32 years

McDonald's sells its business in Russia after 32 years

After more than three decades in Russia, McDonald’s – an icon of American lifestyle and capitalism – is selling its Russia business as it looks to leave the country entirely.

This step represents an important breakthrough for the brand whose growth around the world has become a symbol of globalization and even The basis of peace theory. As the aspirations of globalization frayed in recent years amid the coronavirus pandemic and geopolitical tensions, the Russian invasion of Ukraine has forced many companies who had hoped for business as usual to take action.

Under increasing pressure from employees and consumers, many brands and restaurant chains have partially – or completely – suspended their operations in Russia. But few left entirely due to concerns about staff welfare and the difficulties of returning after departure. McDonald’s said in Walks It will temporarily close its operations there, as many other chains have done, including Starbucks and Yum Brands, the parent company of KFC and Pizza Hut. Many employees and activists paid for the entire order deflation.

“This is a complex, unprecedented issue with grave consequences,” Chris Kempczynski, McDonald’s CEO, wrote in a letter to franchisees, employees and suppliers obtained by The New York Times.

“Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens is certainly the right thing to do. But it is impossible to ignore the humanitarian crisis caused by the war in Ukraine. It is impossible to imagine that the Golden Arches represent the same hope.” And the promise that led us to enter the Russian market 32 ​​years ago. ”

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McDonald’s plans to sell its business, which employs 62,000 people and includes 850 restaurants (including those operated by franchisees), to a local buyer. It will “remove the bracket” of those restaurants, which means they will not use the McDonald’s name, logo or brand. McDonald’s He said in a statement Its “priorities include seeking to ensure that McDonald’s employees in Russia continue to be paid until any transaction is closed and that employees have future jobs with any potential buyer.” It will keep its trademarks in Russia.

As a result of the move, McDonald’s will record a write-off of $1.2 billion to $1.4 billion and recognize “foreign currency translation losses,” the company said in the statement.

McDonald’s entry into Russia began at the 1976 Olympics in Montreal, Kempzinski wrote in his note to franchisees, employees and suppliers, when the chain allowed the Russian Olympic team to use the Big Mac Bus. Fourteen years later, in January 1990, McDonald’s was opened in Moscow.

“In McDonald’s history, he was one of our proudest and most exciting,” wrote Mr. Kempczynski. “After nearly half a century of Cold War hostility, the image of the golden arches shimmering over Pushkin Square to many, on both sides of the Iron Curtain, heralded the beginning of a new era.”