McDonald’s is “de-Arching” its Russian locations
The ubiquitous fast-food chain is leaving Russia, citing a need to “remain steadfast in our values.”
In 1990, McDonalds opened its first Russian location in Moscow’s Pushkin Square to a line of 30,000 people. Since then, over 800 McDonald’s have opened up across the country. But now, McDonald’s Russian era is officially coming to an end.
On Monday, McDonald’s CEO Chris Kempczinski announced the corporation’s plan to “completely exit the Russian market” in order to “remain steadfast in our values.” If that sounds familiar, that’s because following the start of Russia’s invasion of Ukraine, McDonalds said in March that it would temporarily close all of its Russian restaurants.
In a new announcement, Kempczinski wrote that McDonald’s “held out hope for peace to soon return to the region.” The announcement is full of the usual corporate CEOs overestimating their brand’s importance (what the hell is “burger diplomacy” or a “McDonald’s peace theory”?), but Kempczinski makes it clear that waiting for “peace” isn’t an option anymore.
“For the first time in our history, we are ‘de-Arching’ a major market and selling our portfolio of McDonald’s restaurants,” Kempczinski wrote. “They will no longer carry the McDonald’s name or serve our menu. The Golden Arches will shine no more in Russia.”
To many, McDonald’s arrival in Russia signaled the end of the Cold War, and that idea is invoked in the company’s announcement. “After nearly half a century of Cold War animosity, the image of the Golden Arches shining above Pushkin Square heralded for many, on both sides of the Iron Curtain, the beginning of a new era,” Kempczinski wrote.
While McDonald’s points to humanitarianism as its reason to withdraw from Russia, there’s always a business side to these decisions. As Bloomberg noted, conducting everyday business in Russia has become increasingly difficult thanks to sanctions placed by both the United States and Europe. By selling, McDonald’s will be able to take a write off worth up to $1.4 billion.
There are about 62,000 McDonald’s employees in Russia — and this isn’t including the “tens of thousands” that Kempczinski said are employed by local distributors. According to NPR, McDonald’s has been paying them since it first paused operations on March 8 and will continue to do so while searching for a buyer. However, Bloomberg reported that McDonald’s will still retain its trademark in Russia.
