After a presence that spans more than 30 years, McDonald’s is about to exit the Russian market.
Three days after announcing its plans to sell its Russian restaurant portfolio McDonald’s reached an agreement to do just that with existing licensee Alexander Govor. Under the terms of the agreement, Govor will acquire the chain’s entire Russian restaurant portfolio and operate the restaurants under a new brand.
Since 2015, Mr. Govor has served as a McDonald's licensee and has operated 25 restaurants in Siberia.
The agreement remains subject to certain conditions, including regulatory approval, with closing expected to occur in the coming weeks, per a McDonald’s release announcing the deal.
The sale and purchase agreement provides for employees to be retained for at least two years, on equivalent terms, per the release. The buyer has also agreed to fund the salaries of corporate employees who work in 45 regions of the country until closing, as well as fund existing liabilities to suppliers, landlords and utilities.
The burger giant reached the agreement to sell its Russian portfolio to Govor a few days after McDonald’s announced its plans to exit the Russian market. This marks the first time McDonald's has exited a given market, per the company. “Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens is surely the right thing to do,” said McDonald’s president and CEO Chris Kempczinski in a letter to employees earlier this week. “But it’s impossible to ignore the humanitarian crisis caused by the war in Ukraine.”
In March, McDonald’s temporarily halted its Russian operations in response to the war in Ukraine. The company did, however, continue to pay its employees in both Russia and Ukraine. As of March, McDonald’s had more than 62,000 employees in the country and operations in 850 communities, per a company email.