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Burger King can’t shut down hundreds of stores based in Russia because its main franchisee in the country has “refused” to do so despite the ongoing Ukraine war, according to a top executive from the fast-food giant’s parent company.
Restaurant Brands International president David Shear detailed the company’s dilemma in an open letter to employees. Burger King operates in Russia through a “joint venture partnership” with businessman Alexander Kolobov, who handles day-to-day operations and oversight of approximately 800 store locations within the country.
RBI holds just a 15% minority stake in the joint venture — meaning it has little recourse if its partners do not cooperate. As a result, the Burger King locations continue to operate even as hundreds of Western companies cut ties with Russia following the invasion.
“We contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia. He has refused to do so,” Shear said in the letter.
The Burger King owner’s other partners in the joint venture are Investment Capital Ukraine, a top investment firm, and VTB Capital, an affiliate of Russia’s VTB Bank. While several counties have sanctioned VTB Bank since the war began, Shear said RBI remains in “full compliance with all applicable sanctions.”
Shear added that RBI has “started the process to dispose [of] our ownership stake in the business.” The company has suspended corporate support for its Russia business and plans to donate any profits through the partnership to the UN’s refugees agency.
“While we would like to do this immediately, it is clear that it will take some time to do so based on the terms of our existing joint venture agreement,” he said.
Shear went on to say that RBI can’t “unilaterally suspend operations” in Russia unless Russian authorities agree to support the move on the ground — a requirement that “will not practically happen anytime soon.”
“Would we like to suspend all Burger King operations immediately in Russia? Yes. Are we able to enforce a suspension of operations today? No,” he said. “But we want to be transparent with our actions and explain the steps we have taken to stand with the international business community in response to Russia’s attack on Ukraine and its people.”
More than 400 Western companies have already exited Russia since the Kremlin ordered its unprovoked invasion of Ukraine. But some companies attempting to leave, including Burger King’s fast-food rival McDonald’s, have encountered difficulties.
While McDonald’s has shuttered all of its corporate-owned stores in Russia, some local franchisees have continued. And Russia has eased laws governing intellectual property protections for Western firms active within the country — sparking concerns that local operators will look to exploit the new loopholes.
A Russian firm called “Uncle Vanya” debuted a logo nearly identical to the McDonald’s “golden arches” as part of its apparent bid to replace the chain in Russia — a move that has drawn support from the Kremlin.
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