New York (CNN Business) – Burger King seeks to suspend its operations in Russia, but it remains difficult. The company said a business partner controlling 800 restaurants had “refused” to close them.
The burger chain, which is owned by Restaurant Brands International, is in a joint venture with businessman Alexander Kolobov in Russia. The RBI controls only 15% of its Burger King business in Russia, with Kolobov responsible for “day-to-day operations and oversight” of its locations in the country.
That means Burger King can’t just crush his fingers and leave the business.
“We have started the process of removal [de] Our role in business, “said David Shearer, RBI’s head of international operations Open letter. “While we want to do it immediately, it is clear that it will take some time to do this in terms of our existing joint venture agreement.”
McDonald’s, on the other hand, owns 80% of its restaurants in Russia. This has made it easier to leave the country.
Sheir said the Reserve Bank had demanded the immediate closure of the Burger Kings, but Kolobov “refused to do so”.
Burger King entered Russia a decade ago, in a joint venture with Kolopov, a Russian bank of investment capital Ukraine and VTB Capital, which was the target of sanctions.
Sheer explained that the “complex legal process” prevents the company and businesses from closing.
“There are no legal provisions that allow the contract to be changed unilaterally or the partner simply to leave or terminate the entire contract,” Sheer said. “No serious investor in any business in the world would accept a long-term business relationship with slim end segments.”
Burger King last week withdrew corporate support for its business in Russia, including suspension of operations, marketing and distribution chain assistance.
This issue highlights the problems that some Western companies and banks face in exiting Russia, which are not fully controlled by joint ventures or alliances. For example, a Papa Jones (PZZA) owner in Russia refused to close about 200 places, even after the pizza chain stopped its corporate support.
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