McDonald's to sell all its Russian branches

MOSCOW, Russia - McDonald's will sell all its branches in Russia to one of its local licensees, businessman Alexander Govor, who will operate fast food restaurants under a new name.

After Vladimir Putin launched his February invasion of Ukraine, McDonald's temporarily closed hundreds of outlets in Russia, costing it $55 million per month.

The company said this week that the humanitarian crisis caused by the invasion and the unpredictable operating environment made running restaurants in Russia no longer tenable or consistent with McDonald's values, so it would sell Russian stores and leave the country.

McDonald's said that Govor, who operates 25 restaurants in Siberia, agreed to buy all 850 Russian McDonald's branches and run them under different branding.

The sale is expected to close within a few weeks, subject to regulatory approval.

McDonald's was one of the first western consumer brands to enter Russia in 1990, and its branch near Pushkin Square opened in Moscow shortly after the fall of the Berlin Wall signaled a new era of optimism at the end of the Cold War.

It is not known if other U.S. chains will follow McDonald's actions and leave Russia. McDonald's owned 84 percent of its Russian stores, giving it more control over its operations than many of its rivals, whose stores are owned by franchisees.

The company left open the possibility that it could return to Russia one day.

In a letter to employees, Chris Kempczinski said it was impossible to predict what the future might hold, but I choose to end my message with the same spirit that brought McDonald's to Russia in the first place.