(Photo : ALEXANDER NEMENOV/ AFP via Getty Images)
After more than 30 years in Russia, the fast-food behemoth McDonald's announced that it will sell its operations.
McDonald's Corporation said on Monday that it will de-arch Russia. That's a far cry from closing a store, as McDonald's and other companies did two weeks after Vladimir Putin initiated his invasion of Ukraine.
Employees were still paid, and storefronts stood with their logos raised, remaining on the parent company's books. In contrast to a wholesale market withdrawal, such moves may be readily reversed. Many more multinational companies followed suit, expressing displeasure but not despair.
McDonald's To Pay Russian Staff After Announcement of Permanent Closure in Russia
Companies are now appropriately departing. Renault SA said on Monday that it is selling all of its Russian assets to a government-controlled organization. There will undoubtedly be more. It's like watching the thaw in Narnia reversed.
Chris Kempczinski, the CEO of McDonald's, remembered how the company's introduction into the Russian market 32 years ago was a victory of optimism. Hope for a country that was finally opening up to the outside world after decades of seclusion. Hope that the globe was becoming a little more linked - exemplified by the ability to order the identical Big Mac in Moscow as in Chicago.
McDonald's intends to pay its Russian staff until a buyer is found. However, as a result of Putin's conflict, those workers, franchisees, and a wide network of suppliers and service providers all face an unclear future. Ronald McDonald House charity and Hamburger University, which taught business skills and gave job chances, will also be gone.
Government-backed organizations will almost certainly try to persuade Russians that nothing has changed and that a local McDonald's will be even better. A new Russian restaurant me-too chain unveiled its logo in March: a Cyrillic "B" (called "V" in Russian) that looks like the golden arches turned sideways, according to the Washington Post.
The action follows Renault's announcement that it would be selling its operations in the nation. The French company said it will sell its 68 percent interest in Avtovaz to a Russian research organization, while its shares in Renault Russia would go to Moscow.
Renault's Russian assets have now become state property, according to Moscow, marking the first significant foreign company to be nationalized since the invasion of Ukraine. Russia and Ukraine contributed around 9% of McDonald's global sales last year. Due to the crisis, the chain's 108 locations in Ukraine remain shuttered, although the firm continues to pay all of its employees full salaries, BBC reported.
McDonald's Leaves Russia
Before suspending operations in March, McDonald's drew criticism for being hesitant to stop doing business in Russia, with some advocating for a boycott. The business, which closed 850 stores temporarily in March, said the humanitarian circumstances and unstable working climate created by the Ukraine conflict led to the decision to leave Russia permanently.
According to BBC, the opening of McDonald's first restaurant in Moscow in 1990, a year before the Soviet Union collapsed, symbolized a thaw in Cold War hostilities. After Putin's murderous invasion of Ukraine, various firms have chosen to cease operations or close offices in Russia in response to employee and consumer requests.
Starbucks and Yum Brands, the parent company of KFC and Pizza Hut, both stopped operating when McDonald's did. Few, however, have completely gone, citing worries about employment, employee welfare, and the possibility of reentering the nation. McDonald's opened its doors in Russia in January 1990, serving more than 30,000 consumers on the first day, as per Mirror.
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