The American fast food company cannot leave Russia for special reasons
While international famous American food and beverage (F&B) brands such as McDonald’s, Starbucks, automobile companies, finance – banks… have left Russia to comply with sanctions.
There is only one brand in the F&B field that has not yet cut off its business in this country with territories spanning two continents. This became the subject of Western press in recent days. It’s Burger King, a fast food brand.
Radio BBC (British) run away “Burger King’s partner in Russia ‘refused’ to close the store” yesterday.
In a letter to employees, David Shear, president of Restaurant Brands International, said he had contacted the operator of the business and asked to suspend operations. Burger King in Russia. But he refused to do so.
Mr. Shear added that making any changes to the local Burger King business “We need the support of the Russian authorities and we know that it will not happen anytime soon“.
Burger King can’t leave Russia because of franchise issues. Photo: TASS.
Restaurant Brands International (RBI), the owner of famous brands such as Burger King and Popeyes, said it had contacted its partner Alexander Kolobov in Russia to express the problem of closing stores amid the crisis. military crisis in Ukraine. But the RBI consortium said it was a “complicated” issue.
Mr. Kolobov told BBC that he had no “authority or power” to stop Burger King’s activities in Russia. The person added that any store closures must be approved by all local investors.
“The decision to terminate or suspend the franchisee’s activities must be made by all shareholders, taking into account the possible impact on employees and their families.“, he said Kolobov said stores in Russia are the livelihood of about 25,000 employees.
Burger King, and British retailer Marks and Spencer (M&S), have been unable to shut down operations in Russia because local stores are run by franchise partners under “complicated” legal arrangements.
Not only is Burger King awkward, there’s another brand
Burger King entered the Russian market 10 years ago, through a joint venture partnership with Mr. Kolobov – the business’s chief executive – and VTB Capital (Russia) and a Ukrainian investment company.
VTB Capital is a branch of VTB Bank, the second largest Russian financial institution that has been sanctioned by the US, UK and other European countries.
Mr. Kolobov owns a 30% stake in the joint venture. “Since the founding of the joint venture, my stake has always been much lower so I can control [doanh nghiệp – PV]“, he said.
Mr. Shear said Restaurant Brands owns a 15% stake in the Russian joint venture. “Although we want to do this immediately. But obviously it will take some time“, added the president of Restaurant Brands International.
Restaurant Brands has ceased supply chain support, operations and marketing to Russia. It will also reject offers for investment and new business expansion in Russia.
According to Fortune, between RBI and Mr. Alexander Kolobov there is quite good relationship in this joint venture. When opening its first store in 2010 in the shopping center Metropolis (Moscow), RBI praised Russia as “a dynamic market with a vibrant economy“.
Restaurant operator Alexander Kolobov, then, said that he “Excited to be part of a leading global brand“.
Subway is being boycotted for not being able to get its Russian franchise partner to stop doing business. Photo: CNBC.
Similar to Burger King, another well-known food brand, Subway, released a statement last week explaining that it was also bound by a franchise agreement that made a withdrawal from Russia impossible.
450 Subway-branded restaurants in Russia”independently owned and operated by local franchisees and managed by an independent master franchisee“.
Subway is facing criticism from consumers for not severing ties with Russia. Hashtag #boycottsubway (rough translation: Boycott Subway) on Twitter emerged in recent days as consumers expressed outrage at the company’s decision to remain in Russia.
Business and marketing
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
