Russia to be 'de-arched'; McDonald's quitting Russia

Chicago: McDonald's, the world's largest fast food restaurant chain is calling it quits from Russia. After more than 30 years of operations in the country, McDonald's Corporation announced its exit from the Russian market through its corporate website.

The preferred choice of instant food-seekers worldwide especially during their international travel, the restaurant in its website informed that it has initiated a process to sell its Russian business.  Russia will hence miss the iconic golden arches,   the hall mark of the burger-intensive eatery in prize real estate points.

McDonald's had earlier announced on March 8 its temporary closure of restaurants in Russia and pausing of its operations in the Russian market.

The company stated that "the humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald's to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald's values."

After temporarily closing its 800-plus outlets in Russia, now the company has decided to leave Russia altogether.


It was following the glasnost in the communist country with an accompanying entry allowed to multi-national players in Russia's market that McDonald's opened its first Russian outlet in Moscow and then a chain in the once closed retail sector, mostly open only to government enterprises. But the company thence did not have to look back spreading its presence through over 800 outlets.

The company is pursuing the sale of its entire portfolio to a local buyer, but that will be limited to the physical infra-structure;  its name, logo, branding and menu will not be part of the sale. All the same the Company says, it will continue to retain its trademarks in Russia.  Most of McDonald's outlets operate through local franchisees.

McDonald's also says that its " priorities include seeking to ensure the employees of McDonald's Russia continue to be paid until the close of any transaction and that employees have future employment with any potential buyer."

McDonald's President and Chief Executive Officer, Chris Kempczinski, said, "We have a long history of establishing deep, local roots wherever the Arches shine. We're exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees. Their dedication and loyalty to McDonald's make today's announcement extremely difficult. However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there."

Meanwhile, McDonald's have closed its outlets in Ukraine, but the company continues to pay full salaries to its employes and "continues to support local relief efforts led by Ronald McDonald House Charities".  That support, says McDonald's, is being offered across Europe where Ukrainian refugees have been arriving.

The closure of outlets in the two countries, is expected to cost the company dear, estimated at approximately $1.2-1.4 billion in non-cash write off of its net investment in the market plus significant foreign currency translation losses previously recorded in shareholders' equity.

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