McDonald’s Corporation says it has commenced the process of selling its business in Russia.
The multinational fast food corporation would be joining several businesses which have exited Russia, following Moscow’s invasion of Ukraine.
McDonald’s said its decision was on the back of its initial plans to temporarily close all its restaurants in Russia.
In a statement issued on Monday, the company noted that it was pursuing the sale of its entire portfolio of McDonald’s restaurants in Russia to a local buyer.
The company said it would initiate the process of “de-Arching” those restaurants, which entails no longer using the McDonald’s name, logo, branding, and menu — and it will continue to retain its trademarks in Russia.
The statement added that McDonald’s 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.
Chris Kempczinski, chief executive, McDonald’s, said the exit was in solidarity with the global community against the humanitarian crisis caused by the Russian war in Ukraine.
“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,” the statement quoted Kempczinski as saying.
“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.”
The company, which has operated its business in Russia for over 30 years, said it expects to record a non-cash charge of about $1.2 billion to $1.4 billion as part of the exit.
It added that this is “to write off its net investment in the market and recognise significant foreign currency translation losses previously recorded in shareholders’ equity”.
Companies including Starbucks, Yum Brand, the parent company of KFCs and Pizza Hut, had suspended operations in Russia, following the war in Ukraine.