Burger King on Friday said that its business partner controlling approximately 800 restaurants in Russia has “refused” to suspend operations in the country.
Driving the news: “We contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia. They have refused to do so,” David Shear, the president of Restaurant Brands International, which owns Burger King, said in a statement.
- Burger King has three joint venture partners in Russia: Alexander Kolobov, “who has extensive restaurant experience and is responsible for the day-to-day operations” of the restaurants, Investment Capital Ukraine and VTB Capital, per the statement.
- Burger King has started the process to divest its ownership stake, but “it is clear that it will take some time to do so based on the terms of our existing joint venture agreement,” Shear said.
- Restaurant Brands International in the meantime has suspended all corporate support for the Russian market, including operations and supply chain support.
- Shear said that the process for Burger King to pull out of Russia will take longer due to the master franchise agreements and joint ventures that were formed.
What he’s saying: “There are no legal clauses that allow us to unilaterally change the contract or allow any one of the partners to simply walk away or overturn the entire agreement,” he said.
- “Any current attempt to enforce our contract would ultimately require the support of Russian authorities on the ground and we know that will not practically happen anytime soon.”