McDonald's finds buyer for restaurants in Russia, set to operate under a new name

The United States of America fast-food chain McDonald's has found a buyer for its restaurants in Russia. Alexander Govor, who operates 25 restaurants in Siberia, has agreed to purchase 850 restaurants of McDonald's in Russia, according to AP. The McDonald's restaurants in Russia will now operate under a new name.

The development comes after McDonald's on Monday, 16 May, announced its plans to sell its 850 restaurants to a local buyer in Russia. The fast-food giant had said that it would seek a buyer who would employ its 62,000 workers in Russia.

McDonald's had said that they will continue to pay their employees in Russia until they complete the deal with the buyer. The American company in a statement announced its exit from the Russian market after more than 30 years of operation. The decision of McDonald's follows their announcement in March when they had temporarily closed restaurants in Russia and halted operations in the Russian market. McDonald's highlighted that their ownership of the business in Russia is "no longer tenable" and is not consistent with the values of the restaurant. According to the statement released by McDonald's, the company plans to begin the process of "de-Arching" those restaurants which no longer would operate using the McDonald's name, logo, branding and menu. However, the company will continue to retain its trademarks in Russia. 

"As part of McDonald’s decision to exit, the Company is pursuing the sale of its entire portfolio of McDonald’s restaurants in Russia to a local buyer," McDonald's announced in a statement. 

McDonald's 'can no longer keep the Arches shining' in Russia: Kempczinski

In the statement, Chris Kempczinski, McDonald’s President and Chief Executive Officer, said that he is proud of his 62,000 employees who work in the restaurants along with Russian suppliers and local franchisees. He stated that their efforts and loyalty make the announcement "extremely difficult." He underscored that they have a commitment to the global community and their commitment to values implies that they "can no longer keep the Arches shining there." Earlier in April, McDonald's had stated that it was losing $55 million (₹5.5 crore) every month due to the closure of the restaurant and had lost more than $100 million (₹10 crore) worth of inventory, according to AP. It is to be noted here that McDonald's has also closed its restaurants in Ukraine, however, they continue to pay salaries to its employees in the war-torn nation. Ever since the Russian invasion of Ukraine on February 24, several companies like Coca-Cola, Renault, Pepsico and Starbucks have announced exit from the Russian market. 

Image: AP