McDonald’s Corporation has announced that it will fully exit the Russian market, initiating a process to sell its Russian business.
This news follows the fast food giant’s announcement in March that it had temporarily closed restaurants in Russia and paused operations in the market. The exit will likely affect marketers and advertisers in the country.
As part of McDonald’s decision to exit, the company is actively pursuing the sale of its entire portfolio of McDonald’s restaurants in Russia to a “local buyer”.
The brand will initiate the process of “de-Arching” the Russian restaurants by ensuring that they no longer use the McDonald’s name, logo, branding, and menu. The company will however continue to retain its trademarks in Russia.
The company has claimed that as a result of its exit from Russia, it expects to record a charge of approximately $1.2-1.4 billion to “write off” its net investment in the market and “recognise significant foreign currency translation losses” previously recorded in shareholders’ equity.
READ MORE: McDonald’s temporarily shuts restaurants in Russia
“The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values,” McDonald’s said.
The multinational corporation will continue to pay its Russian staff until a deal is struck and will ensure that employees have future employment with any potential buyer.
“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,” McDonald’s president and chief executive officer, Chris Kempczinski, said.
“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.”
As for the company’s business in Ukraine, the company continues to pay full salaries for its employees in the country and continues to support local relief efforts led by Ronald McDonald House Charities.
Click here to sign up to Marketing Beat’s free daily email newsletter
