US fast food giant McDonald’s is selling its entire Russian business to businessman Alexander Govor. Possible new brand names for the burger restaurants are already circulating in Russia.
When McDonald’s opened its first branch in Moscow at the end of the Cold War in 1990, 30,000 Russians stood in line. Now the golden M is disappearing from Russia again. Because of the war of aggression against Ukraine, the US fast food company with its 850 branches is withdrawing completely from Putin’s empire.
All of the chain’s Russian burger restaurants will be sold to businessman Alexander Govor, McDonald’s announced on Thursday. Govor has been a McDonald’s franchisee since 2015 and operates 25 branches in Siberia. Now he takes over all 850 stores, but has to change the name of the restaurants.
According to US journalist Kevin Rothrock, the Russian Ministry of Commerce has called on Telegram citizens to collect name suggestions. Among the suggestions are “Rosburger”, “RusDonald’s” or “ZBurger”. The Z is the Russian propaganda symbol for the campaign in Ukraine.
Whether Govor is seriously considering any of the proposals is unknown. A few weeks ago, however, another trademark application at the Russian Patent Office caused a stir. A company registered the trademark “Onkel Vanya” for restaurants, cafes and similar purposes. The logo looks like an upside down M and is kept in the original McDonald’s colors.
McDonald’s has to write off billions
McDonald’s initially kept its Russian branches open after the attack on Ukraine, but closed them for the time being in mid-March after calls for a boycott in western countries. The final end of the Russian business hits the group hard. McDonald’s operated most of the Russian branches itself and not in the typical franchise model, which outsources the entrepreneurial risk to a large extent. For the withdrawal, McDonald’s now has to write off values of 1.2 to 1.4 billion dollars.
In addition, the group will lack around 9 percent of its revenues in the future, because the Russian restaurants contributed so much to global business. It is not known what amount Alexander Govor will have to pay to take over the stores. However, McDonald’s was obviously not in a good negotiating position because of the fundamental decision to withdraw. The agreement stipulates that Govor will not only take over the branches but also all employees and will employ them for at least two years on the same terms. McDonald’s last had 62,000 employees in Russia.
