Franchise owner refuses to close Burger King franchise in Russia

Franchise owner refuses to close Burger King franchise in Russia

Huge loss for the franchise owner who refused to close his 800 Burger King restaurants in Russia.

Burger King store owner refuses to close doors after entrepreneur In early March the fast food company announced it would suspend support for franchisees operating in Russia.

Burger King in Russia

The owner of 800 restaurants is Russian Alexander Kolobov, The entrepreneur has a joint venture partnership with Restaurant Brands International (RBI), the owner of the Burger King brand. RBI accounts for 15% of BK’s business, while Kolobov controls the daily operations of franchisees in the country.

The fast food chain in Russia works with the bank VTB Capital through a partnership with the investment fund ICU (Investment Capital Ukraine) (the second largest bank in the country and which was sanctioned by the United States) and with Alexander Kolobov who is against the suspension of activities.

Big companies have already closed their operations in the country

Big names in the West, such as giant Coca-Cola, McDonald’s and Starbucks, have already suspended operations in Russia. As a result of the conflict between the country and Ukraine. The escalation of sanctions further exacerbates the departure of business groups from Russian territory.

According to a statement given by David Shearer, Chairman of International Operations of RBI, RBI demanded that the joint venture shut down all the franchises immediately, but Alexander Kolobov refused to comply.

Shear explained the difficulty of closing BK Restaurants in a statement. “While we want to do this immediately, it is clear that it will take some time to do so based on the terms of our existing joint venture agreement,” he explains.

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Many companies already calculate the damage caused by closing their doors in Russia. One of Burger King’s Big Competitors, the Fast Food Chain McDonald’s, which had about 850 restaurants in the country, has already suffered an estimated loss of US$50 million per month.

In addition to the effects on the world economy, the conflict between Russia and Ukraine reached its 28th day this Wednesday, with thousands of deaths.

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Hannah Aragon

Hannah Arago is a graduate in journalism from the Federal University of Pernambuco, UFPE. He worked in several areas of communication, including consulting, endo marketing, strategic communication and print journalism. Currently, he devotes himself to online journalism, producing articles for the FDR portal.

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About the author: Sarah Gracie

"Proud social media buff. Unapologetic web scholar. Internet guru. Lifelong music junkie. Travel specialist."

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