Representatives of the Russian restaurant operator have explained that the situation is complicated by the cooperation agreements concluded with foreign partners, therefore “it is not possible to simply withdraw from these transactions”.
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Alexander Kolobov, a partner of Burger King’s Restaurant Brands International (RBI) in Russia, was called upon to close Burger King’s restaurants in Russia, but Kolobov stressed that he had no authority or other means to suspend restaurants in Russia. He pointed out that the closure of any kind of restaurant must be agreed with investors.
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“The decision to close restaurants, which employ about 25,000 people, must be made by shareholders, given that the closure of restaurants could have a negative impact on employees and their families,” Kolobov said.
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Many Western companies have either suspended or ceased operations in Russia due to its war in Ukraine. However, there are still a small number of Western brands that continue to operate in Russia. Among them is not only Burger King, but also the British trader Marks and Spencer (M&S), which has been unable to close stores because the franchisees have “very complex cooperation agreements”.
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RBI President David Shear said that “We have contacted the main manager of Burger King in Russia and demanded that the restaurants be closed, but the operator’s representative has refused to do so.”
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Heir added that he was aware that the closure of Burger King’s restaurants would require the consent of the Russian authorities, but that permission could not be expected. At least not in the near future.
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Burger King entered the Russian market 10 years ago. Here, the brand works with a company led by Kolobov, which in turn works with a Ukrainian investment company and VTB Capital. It should be noted that VTB Capital is one of the companies in the VTB Bank group that has been sanctioned by the European Union, the United States and the United Kingdom.
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Kolobov says he owns a 30% stake in Burger King’s Russian business, so he doesn’t have enough power to influence the closure of restaurants. RBI, in turn, owns 15% of the shares in Russia.
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“It simply came to our notice then [restorānu slēgšana] “It will take some time, given that there are different agreements between our companies,” said Kolobov. RBI has suspended cooperation with Burger King’s managers in Russia, and all marketing and financial activities have been suspended.
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Western companies are under great pressure to operate in Russia. For example, on Thursday, a member of the Ukrainian parliament stressed to the British Prime Minister Boris Johnson that M&S is still operating in Russia.
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“It is very important to isolate Putin, and he must realize that he will not even receive a handshake from the rest of the world; there will be no foreign business in his country that does not support the murder of children in Ukraine,” said Alona Shkruma, a deputy.
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In this case, M&S does not allow complicated cooperation agreements to leave the Russian market. However, M&S representatives have publicly condemned Russia’s unjustified attack on Ukraine. M&S stores in Russia are managed by the Turkish company FiBA, which has been selling the company’s products in Eastern Europe since 1999.
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M&S representatives said they had stopped supplying goods to FiBA, which operates 48 stores in Russia.
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