Business

Burger King’s Russian partner claims it doesn’t have the authority to close 800 stores

Burger King’s key partner in Russia says it is unable to close about 800 stores after the invasion of Ukraine, refuting a claim by the fast-food chain’s US management that it had their request Closure of locations “rejected”.

Russian businessman Alexander Kolobov fired back after Restaurant Brands International president David Shear said in an open letter the franchisee was defying a company policy to close stores.

Kolobov claims he doesn’t have the “authority or power” to unilaterally close the 800 stores in response to the invasion, arguing that his 30 percent stake in a joint partnership with Burger King is “well under control” to take action to take.

RBI holds a 15% minority stake in the company and is selling its shares in Russia following the dispute.

“The decision to terminate and suspend the operations of the franchisee, which employs approximately 25,000 people, must be taken by all shareholders as it could impact employees and their families,” Kolobov said in a statement the BBC.

Burger King in Russia
Burger King’s parent company said it plans to sell its shares in Russia.
SOPA Images/LightRocket via Gett

The RBI did not immediately respond to a request for comment on his remarks.

RBI’s Shear said the Burger King owner operates in Russia through a joint venture partnership with Kolobov, investment firm Investment Capital Ukraine and VTB Capital, a subsidiary of Russia’s VTB Bank.

Kolobov’s response contradicted Shear’s stance in the open letter explaining the Burger King conundrum in Russia. In the lengthy statement, Shear claimed that Kolobov was “responsible for the day-to-day operations and oversight of Russia’s approximately 800 restaurants.”

Burger King store in Russia
Burger King’s parent company said its Russian partner “refused” to close 800 stores after the invasion of Ukraine.
SOPA Images/LightRocket via Gett

“We contacted the main operator of the store and demanded the cessation of Burger King restaurant operations in Russia. They refused to do this,” Shear said.

The terms of the deal meant Burger King cannot close without Kolobov’s approval or intervention from Russian authorities, which are increasingly hostile to Western companies, according to Shear.

Shear added that RBI has stopped “all corporate support” for Burger King locations and Russia and plans to donate all proceeds from their partnership, including the sale of their stake, to the United Nations Refugee Agency.

“Do we want to stop all Burger King activities in Russia immediately? Yes. Can we enforce a cessation of operations today? No,” Shear added.

RBI’s altercation with one of its business partners highlights the challenges some Western companies have faced in conducting operations in Russia in response to the Kremlin invasion.

McDonald’s, Burger King’s fast-food rival, closed all of its stores in Russia — only to see a local operator named “Uncle Vanya” file a trademark application with a logo almost identical to his “golden arches.” , in an apparent attempt to take over his business.

https://nypost.com/2022/03/21/burger-kings-russia-partner-claims-he-has-no-authority-to-close-800-stores/ Burger King’s Russian partner claims it doesn’t have the authority to close 800 stores

DUSTIN JONES

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