McDonald's sells its Russian franchises to a millionaire from the country

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Updated: 05/20/2022 14:18h
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McDonald's has reached an agreement to sell its business in Russia to local businessman Alexander Govor, who owns several of the chain's franchises, the company said on Thursday. The price of the transaction is still unknown.

The North American multinational joins the rest of companies such as H&M, Ikea or Starbucks, which have left Russia in recent months as a rejection of the invasion of the country led by Vladimir Putin to its neighbor Ukraine.

The announcement comes three days after McDonald's announced its exit from the Russian market. Govor agreed to keep employees on the payroll for at least two years, in addition to financing existing obligations with suppliers, owners and public services, as reported by the fast food multinational.

McDonald's said on Monday it was putting up for sale its entire Russian portfolio of 850 restaurants employing 62,000 people, due to the humanitarian crisis following the invasion of Ukraine, which has also triggered international sanctions against Russia. "The business in Russia is no longer sustainable, nor is it consistent with McDonald's values," they have pointed out from the company.

However, the company does not rule out the possibility of resuming activity in the future. “It is impossible to predict what the future holds, but I have decided to end my message in the same spirit that led McDonald's to expand to Russia in the first place: hope,” CEO Chris Kempczinski said in a letter to employees.

Govor, a franchisee since 2015, was in charge of expanding the brand throughout Siberia and was in charge of 25 restaurants. He is a co-founder of Neftekhimservice, a refining company, and a member of the board of directors of another firm that owns the Park Inn hotel and private clinics in Siberia.

The American group indicated on Monday that it will record in its accounts a cost associated with this withdrawal of 1,200 to 1,400 million dollars, ending 30 years of activity in the Slavic giant.

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