Burger King is still trying to stop operations in Russiabut a local business partner who holds control of 800 restaurants refuses to close.
“We have already started the process of divesting our stake in this business. While we want to do this immediately, it is clear that the process will take time to do so under the terms of our existing joint venture agreement,” said David Shear, president of international operations at RBI (Restaurant Brands International). ), the parent company of Burger King in an open letter.
The restaurant chain has a partner agreement with businessman Alexander Kolobov in Russia.
Under the agreement, the RBI controls only 15 percent of Burger King’s Russian business, while Kolobov is responsible for the day-to-day operations of the shops in the country.
Meanwhile, McDonald’s owns more than 80 percent of its restaurants in Russia, making it easier for them to close their shops and leave the country.
Shear said that the RBI had pushed for local partners to close Burger Kings immediately, but Kolobov refused.
Burger King entered Russia nearly a decade ago and began operating joint ventures with Kolobov and Ukraine’s Investment Capital and VTB Capital, a Russian bank hit hard by the sanctions.
Shear explained that a complicated legal process prevented him from closing the partnership and the business.
For information, last week Burger King’s parent company said that it had suspended all of its company’s support in the Russian market, including operations, marketing and supply chain.
The company also halted investment and expansion in the region. Even so, that doesn’t mean Burger King restaurants will close completely in Russia. The reason is, around 800 branches there are fully managed by local main franchisees.
“Burger King Russia is an independent business owned and operated by our franchisee in this country. We have a legal agreement that is not easily changed,” RBI said in a statement to CNN Business.
In this regard, Burger King is committed to diverting profits from its franchise operations to help Ukrainian refugees.
(tdh/chs)
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