The parent company of fast food chain Burger King said it has not been able to close its 800 restaurants in Russia as its joint venture partner has “refused” to do so.
Burger King, owned by Restaurant Brands International (RBI), last week said it had suspended all corporate support for its business in the country, following a host of other brands including rival McDonald’s sought to cut ties with Russia after Vladimir Putin’s invasion of Ukraine.
But in a letter to employees, David Shear, RBI’s president for international operations, highlighted the complications involved in trying to stop operations.
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Mr 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.”
Mr Shear said that in order to enforce its contracts with Alexander Kolobov, the franchisee, it would need the help of the Russian government but “we know that will not practically happen anytime soon”.
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Reuters news agency said it was not immediately clear how to reach Kolobov for comment.
RBI entered Russia a decade ago through a joint venture partnership with three entities: Mr Kolobov, who controls day-to-day operations, private equity and asset management firm Investment Capital Ukraine, and Russia’s state-owned VTB Bank – which has been hit by Western sanctions.
Mr Shear said the company has begun the process of disposing of its 15% ownership stake in the joint venture.
He said it wants to do so immediately but that it will take “some time” based on the terms of the agreement.
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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.
“Would we like to suspend all Burger King operations immediately in Russia? Yes,” Mr Shear wrote in his letter.
“Are we able to enforce a suspension of operations today? No.”
