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Friday, March 18, 2022

Putin’s War: Partner refuses to shut down Burger King’s restaurants in Russia

“Any current attempt to enforce our contract would ultimately require the support of Russian authorities on the ground.”

• March 18, 2022
BURGER KING
Burger King in Russia [Photo credit: Mashed]

Fast food franchise Burger King says it has not been able to close its 800 restaurants in Russia as its joint venture partner has “refused” to do so.

Restaurant Brands International’s (RBI) president for international operations, David Shear, explained why the businesses were still operating in a letter to its employees.  

“We contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia,” Mr Shear said. “He has refused to do so.”

Mr Shear added that to enforce its agreements with partner Alexander Kolobov, it would need the help of the Russian government. 

“Any current attempt to enforce our contract would ultimately require the support of Russian authorities on the ground, and we know that will not practically happen anytime soon,” Mr Shear wrote.

RBI has been in joint venture partnership for the past decade with three entities: Mr Kolobov, who controls day-to-day operations, private equity and asset management firm Investment Capital Ukraine, and Russia’s state-owned VTB Bank – hit by Western sanctions.

Burger King had earlier said it would suspend all corporate support for its businesses in Russia due to President Vladimir Putin’s invasion of Ukraine.

McDonald’s was the first major U.S. fast-food chain to pull out of Russia, announcing that it would temporarily shut down its 850 stores. Other big chains like Starbucks followed shortly after. 

Since the invasion of Ukraine on February 24, brands like Netflix, Google and Shell have all exited the Russian market. 

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