Restaurant Brands International (RBI), the company that holds a 15% stake in the fast-food franchise industry in Russia, informed the BBC that it currently has no new information to provide regarding its departure.
In March 2022, the company had announced its initiation of the exit process from the Russian market.
In the wake of the conflict in Ukraine, Western corporations have faced increasing demands to withdraw from Russia.
Critics have accused RBIof indirectly supporting President Putin’s government by retaining its ownership in the Russian business.
In March 2022, David Shear, the President of RBI, noted that Burger King’s primary operator in Russia had resisted closing its outlets in the aftermath of the initial attacks on Ukraine. He also mentioned that the company had initiated the process to divest its 15% ownership stake, though he anticipated that this would be a time-consuming endeavor.
When the BBC inquired about the status of these developments 18 months after the commitment was made. And a representative from the Canadian-American firm stated that there were no new updates to share.
According to David Bond, a partner at the law firm Fieldfisher, RBI’s 15% ownership stake doesn’t grant. It the authority to unilaterally impose conditions on its fellow shareholders to compel them to close Burger King branches in Russia. Bond also pointed out that companies engaged in franchise agreements would be hesitant to abruptly terminate these arrangements. As it could lead to significant consequences, including potential lawsuits for breach of contract and harm to their reputation.
Nonetheless, Bond clarified that, regardless of the potential repercussions. There is nothing preventing RBI from terminating the franchise agreement if it remains resolute in its decision. However, this might not necessarily result in the complete disappearance of the Burger King brand from Russia.
He mentioned that in most cases of “de-branding” in the country. Such as the example of McDonald’s, it typically involved negotiated sales with local entrepreneurs. Who were willing to rebrand their businesses in exchange for a reduced purchase price. fast-food franchise