Burger King | Russia

Parent company RBI wants out

There are around 800 Burger King stores in Russia. Withdrawal from the market is proving difficult for parent company RBI.
There are around 800 Burger King stores in Russia. Withdrawal from the market is proving difficult for parent company RBI.

The parent company of the fast food chain Burger King wants to give up its business in Russia in view of the war against Ukraine. The withdrawal from the country is planned, but will take some time. The reason for this is the conditions on the ground.

"Would we like to suspend all Burger King operations in Russia immediately? Yes," group CEO David Shear wrote in an open letter. "Are we able to enforce a suspension of operations today? No. 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." The reason that the 800 or so stores would remain open, he said, was because of franchise partners controlled by businessman Alexander Kolobov. RBI holds only a 15 percent stake in the joint venture in Russia.

However, the group had stopped all support for the branch network and was no longer investing in Russia itself. However, it would be difficult to wind up the business because of the contracts and would probably require the approval of the Russian authorities. This is not expected to happen quickly. The exit is a complicated legal process that is likely to drag on, RBI CEO Shear said.

"We committed to redirecting any profits we receive from the business, including our ownership stake, to the United Nations’ refugee agency (UNHCR) and made an immediate donation of $1M toward that commitment. We’ve also worked with franchisees from more than 25 countries to distribute $2M of free meal coupons for Burger King restaurants to NGOs supporting Ukrainian refugees", Shear added.

Burger King's competitor McDonald's announced last week that it would close its roughly 850 locations in Russia. In Germany, meanwhile, Burger King's partner Kolobov is still remembered for conflicts over alleged hygiene deficiencies and poor working conditions. In 2014, the chain had terminated his license for this reason. An agreement was later reached to continue operating the 84 stores in Germany controlled by his company.

About RBI

Restaurant Brands International Inc. is one of the world's largest quick service restaurant companies with more than $35 billion in annual system-wide sales and over 28,000 restaurants in more than 100 countries. RBI owns four of the world's most prominent quick service restaurant brands – Tim Hortons, Burger King, Popeyes and Firehouse Subs.