McDonald’s said Monday it has begun the process of selling its Russia business, which includes 850 restaurants and employs 62,000 people, making it the latest major Western company to exit Russia since it invaded Ukraine. in February.
The fast food giant pointed to the humanitarian crisis caused by the war, saying that sticking with its business in Russia was “no longer defensible, and incompatible with McDonald’s values.”
The Chicago-based company announced in early March that it would temporarily close its stores in Russia but would continue to pay employees. On Monday, it said it would seek to hire a Russian buyer these workers and pay them until the sale closes. The potential buyer was not identified.
CEO Chris Kempczynski said the “dedication and loyalty to McDonald’s” to employees and hundreds of Russian suppliers made the decision to leave difficult.
“However, we have a commitment to our global community and must remain steadfast in our values, and our commitment to our values means we can no longer maintain the brightness of the arcs there,” Kempczynski said in a statement.
McDonald’s, as it tries to sell its restaurants, said it plans to begin removing golden arches and other symbols and signage bearing the company’s name. She said she would keep her trademarks in Russia.
The first McDonald’s in Russia was opened in the center of Moscow More than three decades ago, shortly after the fall of the Berlin Wall. It was a powerful symbol for relieving Cold War tensions between the United States and the Soviet Union.
McDonald’s was the first American fast food restaurant to open in the Soviet Union, which would collapse in 1991. McDonald’s decision to leave comes as other American food and beverage giants, including Coca-Cola, Pepsi and Starbucks, temporarily halted or closed their operations in Russia in the face of Western sanctions.
Companies from British energy giants Shell And BP to French carmaker Renault pulled out of Russia, hurting its bottom line as they seek to sell their holdings there. Other companies have stayed at least partially, with some facing a negative reaction.
McDonald’s said it expects to post a fee for profits of between $1.2 billion and $1.4 billion on leaving Russia.
Its restaurants in Ukraine have been closed, but the company said it continues to pay full salaries to its employees there.
McDonald’s has more than 39,000 locations in more than 100 countries. Most are owned by franchisees – only about 5% are owned and operated by the company.
McDonald’s said that the exit from Russia would not change its forecast of adding 1,300 restaurants this year, which would contribute about 1.5% to sales growth company-wide.
Last month, McDonald’s reported that it earned $1.1 billion in the first quarter, down from more than $1.5 billion a year earlier. Revenue was approximately $5.7 billion.
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