McDonald's is shuttering operations in Russia due to the country's invasion of neighboring Ukraine, so it's not surprising that Burger King would try to follow suit. But there's now a wrench in those plans, as the latter fast-food giant is seeing its efforts stymied by a business partner who's doesn't want to go that route, reports CNN Business. Restaurant Brands International is the chain's parent company, but in Russia, the firm has teamed up with three entities in a joint venture and controls only about 15% of the BK eateries there. Businessman Alexander Kolobov is the one who oversees the "day-to-day operations" of the 800 or so Burger King restaurants in Russia, putting corporate in a bit of a conundrum.
"Would we like to suspend all Burger King operations immediately in Russia? Yes. Are we able to enforce a suspension of operations today? No," writes David Shear, president of RBI's international division, in an open letter. Shear goes on to say of Kolobov that "we contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia. He has refused to do so." Shear notes the "complicated legal process" that involves RBI, Kolobov, Investment Capital Ukraine, and VTB Capital, one of Russia's largest banks, and one that's been hit with sanctions over the war.
In short, RBI would need to have government intervention to help them enforce their contract with their partners—"and we know that will not practically happen anytime soon," Shear laments. Reuters notes that the Burger King problem sheds light on the larger one of American brands becoming involved in international markets via independent operators. The news agency points out that Starbucks is similarly set up in Russia, with a third party running its locations there. Unlike Burger King's situation, however, Starbucks' partner—a retail franchise operator based in Kuwait—concurs with shuttering its 130 locations in Russia and has done so. (More Burger King stories.)
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