McDonald’s says nothing about why some establishments are still open in Russia

After publicly announcing three weeks ago that it was suspending operations in Russia, McDonald’s has now remained silent on why some of its restaurants are still open in the country.

This week, CBC News visited two Moscow McDonald’s serving burgers and fries, and online reports indicate other Russian locations also remain operational.

Despite multiple inquiries, McDonald’s did not explain why these restaurants did not close.

However, the US-based fast food chain was open about its plans on March 8 when it announced that all 850 locations in Russia would temporarily close in protest at the country’s invasion of Ukraine.

“We join the world in condemning aggression and violence and praying for peace,” McDonald’s CEO Chris Kempczinski said in a statement. at the time.

McDonald’s has joined several multinationals, including other fast-food chains, suspending operations in Russia following pressure on social media. But some of these chains, such as Burger King, Subway and KFC, continue to come under scrutiny because, despite having gone out of business, their franchises remain open for business.

CBC News visited a McDonald’s at Moscow’s Domodedovo Airport on Friday. An employee said it was still open because it’s a franchise operation. (Dmitry Kozlov/CBC)

In response to an email request, McDonald’s told CBC News on March 10 that all of its Russian locations would close, including franchise restaurants.

But shortly after McDonald’s closed its Russian locations on March 14, reports surfaced that some remained open.

Last week, a Russian media RIA Novosti said that, according to a statement from McDonald’s, a number of its franchises in Moscow were still operational.

CBC News visited a McDonald’s restaurant at Moscow’s Leningradsky station on Thursday and found it packed with customers. Most of the seats were taken in the dining room and there was a long line of customers waiting to pick up their orders.

CBC News visited a McDonald’s restaurant at Moscow’s Leningradsky station on Thursday and found it open and busy. (Dmitry Kozlov/CBC)

On Friday, CBC News visited another McDonald’s at Moscow’s Domodedovo Airport. It too was open and serving dozens of customers.

An employee at each location said the restaurant remained open because it was a franchise operation.

And Moscow isn’t the only city where Russians can still get a Big Mac.

Also on Thursday, Will Vernon, senior producer in the BBC’s Moscow bureau, tweeted he discovered a McDonald’s serving customers in St. Petersburg.

“Staff have told me that because this is a franchise they are still open and will continue to operate,” he said.

Over the past week, CBC News has repeatedly reached out to McDonald’s for comment on open locations and on Thursday sent photos. The company did not respond.

According to information published by McDonald’s online, there were 847 McDonald’s in Russia at the end of 2021 and 84% of them were company-controlled. This means that 135 sites were operated independently.

The word is out

Business professor Ian Lee said he suspects that the still-operating McDonald’s are independently run restaurants that have some type of franchise or joint venture agreement with the company, making it difficult for McDonald’s to sell them. arbitrarily close.

But Lee said the chain needs to explain publicly why certain sites are still serving customers.

“When they claim they’ve got them all shut down, and they’re not all shut down, and then go silent about why they’re not shut down, all they’re doing is hurting on their mark,” said Lee, an associate professor at Carleton University in Ottawa.

Already, people on social media are demanding answers after watching videos and photos posted online of McDonald’s allegedly still operating in Russia.

“Anyone in the world who owns a cell phone is potentially a spy,” Lee said.

“The company needs to get ahead of the story and be transparent, because sooner or later the truth will come out.”

Other fast food chains have publicly explained why their franchise operations are still open in Russia.

Last week, Subway issued a statement that it was unable to close its 450 restaurants in the country because they are independent franchises, run by an independent master franchisee.

Subway also said it is redirecting all corporate profits made in Russia to humanitarian efforts in Ukraine.

WATCH | When Russia’s first McDonald’s opened in 1990:

McDonald’s opened its first Russian site in 1990

Russians flocked to the country’s first-ever McDonald’s, in Moscow’s Puskin Square. 3:23

Toronto-based Restaurant Brands International (RBI) also released a statement last week explaining why its 800 Burger King restaurants, which are managed by a master franchisee, remain open in Russia.

In a detailed letter posted onlineRBI International President David Shear said that as a result of a joint venture partnership, RBI controls only 15% of Burger King’s operations in Russia.

Shear said RBI had previously contacted Burger King’s “main operator” in the country to ask it to suspend operations, but it “refused to do so”.

As a result, RBI is now trying to divest its stake in Burger Kings in Russia, but “it will take some time to do so based on the terms of our existing joint venture agreement,” Shear said.

Meanwhile, RBI has suspended all support for businesses in Russia and is redirecting profits to humanitarian efforts, he said.

Supply issues could still force closure

Franchise lawyer Daniel So said multinational companies often rely on a master franchisee to run sites in foreign countries and usually have little or no power to force them to close.

“When these master franchise agreements are negotiated, the termination clauses are often very, very thin,” said Victoria-based So with McKenzie Lake Lawyers.

“[This] is not surprising given the amount of investment required by the master franchisee to operate in the territory.”

Daniel So, a franchise lawyer, explains that multinational companies often use a master franchisee to manage their overseas sites. (Submitted by Daniel So)

But So said franchise operations still open in Russia may close soon, not because headquarters want them to, but because they may run out of supplies.

In the same way hundreds of companies withdraw from Russia, the country has been hit by sweeping international sanctions that are disrupting supply chains. So said, some of the supplies franchisees depend on that come from outside of Russia may soon dry up.

“[That] can force the closure of these restaurants where the franchisor could not require the closure. »

With files by Dmitry Kozlov