McDonald’s is temporarily closing 850 restaurants in Russia.
McDonald’s is temporarily going dark in a market where it has a large corporate-owned footprint and financial stake.
The company said it will temporarily close 850 restaurants and pause operations in Russia in response to the country’s invasion of Ukraine. McDonald’s will continue to pay its 62,000 employees in Russia. Also, Ronald McDonald House Charities Russia will continue its full operations, just as RMHC Ukraine is partnering with local hospitals and providing humanitarian aid throughout the country.
“We understand the impact this will have on our Russian colleagues and partners, which is why we are prepared to support all three legs of the stool in Ukraine and Russia,” McDonald’s CEO Chris Kempckinski wrote in an open letter to McDonald’s employees and franchisees. “This includes salary continuation for all McDonald’s employees in Russia.Our number one priority from the start of this crisis has been – and will remain – our people.”
The company has also temporarily shuttered its 100 restaurants in Ukraine and continues to pay its employees there. It also donated $5 million to the Employee Assistance Fund, and continues to support relief efforts led by the International Red Cross in the region.
McDonald’s said it was unsure as when its Russian restaurants would open.
“At this juncture, it’s impossible to predict when we might be able to reopen our restaurants in Russia,” Kempckinski wrote.
McDonald’s, which has more than 40,000 locations in over 100 countries, opened its first location in Moscow months before the collapse of the Soviet Union. In a recent regulatory filing, the company said its restaurants in Russia and Ukraine accounted for 2% of its systemwide sales and approximately 9% of its revenue, about $2 billion.
Unlike some restaurant brands whose locations in Russia are primarily owned by franchisees, McDonald’s owns 84% of its Russian locations. In contrast, all Starbucks stores in Russia and Ukraine are owned by franchisees.
“In the thirty-plus years that McDonald’s has operated in Russia, we’ve become an essential part of the 850 communities in which we operate,” Kempczinski stated. “At the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”
Last week, TJX Cos., parent company of TJ Maxx, Marshalls and Home Goods, said it would divest its 25% equity ownership in Familia, which operates more than 400 off-price stores in Russia, “in support of the people of Ukraine.”