Burger King franchise allegedly ‘refused’ to close 800 Russian locations 

Burger King is moving to divest its 15% stake in its Russian business, but they said it can’t legally suspend operations in the market right away.

Burger King announced last week it was suspending all corporate support for its 800-plus franchised locations in Russia in response to the Kremlin’s ongoing attacks on Ukraine. The suspension includes refusing approvals for further investment or expansion and pausing operations, marketing and its supply chain.

Burger King joined the Russian market a decade ago, and it trades through a joint-venture Mr Kolobov and investment banking firms in Ukraine, Investment Capital Ukraine, and Russia, VTB Capital.

Restaurant Brands wrote a letter to employees on Thursday, where international president David Shear said: “We contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia. He has refused to do so.”

This is because of “complicated” legal arrangements within the company’s structure and long-term franchise agreements limits its ability to close the restaurants.

“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,” Shear said. “No serious investor in any industry in the world would agree to a long-term business relationship with flimsy termination clauses.”

Shear continued: “I know that many of you have been following the horrifying attacks on Ukraine. There have been a lot of media reports about brands continuing to operate in Russia and internally, we have been working around the clock to do all the right things.”

In the meantime, Restaurant Brands International and Burger King have donated $1 million to the United Nations’ Refugee Agency and an additional $2 million in free meal coupons for the Ukrainian refugees.