McDonald’s is temporarily closing all of its restaurants in Russia amid calls for brands to cease operations and business with the country over its invasion of Ukraine.
McDonald’s had 847 locations in Russia at the close of last year, according to an investor document .84% of the restaurants are company-operated with the rest operated independently.
“McDonald’s has decided to temporarily close all our restaurants in Russia and pause all operations in the market.We understand the impact this will have on our Russian colleagues and partners,” said McDonald’s CEO Chris Kempczinski in a statement first emailed to McDonald’s employees and franchisees.n n n
There are many considerations.For 66 years, we have operated with the belief that communities are made better when there’s a McDonald’s nearby.—Chris Kempczinski, CEO, McDonald’s
McDonald’s has been one of many brands feeling an increasing sense of pressure to stop its business activities in Russia.The hashtag #boycottmcdonalds was trending on Twitter.
“In recent days, I have spoken with and heard from many in our system about our operations in Russia,” Kempczinski said.“The situation is extraordinarily challenging for a global brand like ours, and there are many considerations.
For 66 years, we have operated with the belief that communities are made better when there’s a McDonald’s nearby.”
Last week, New York state comptroller Thomas DiNapoli publicly urged McDonald’s to end its business affairs in Russia because they face “significant and growing legal, compliance, operational, human rights and personnel and reputational risks.” n n n
Kempczinski said McDonald’s will continue to pay its 62,000 Russian employees.He was unsure of when McDonald’s would be able to open up it restaurants again.“At this juncture, it’s impossible to predict when we might be able to reopen our restaurants in Russia,” Kempczinski said.“We are experiencing disruptions to our supply chain along with other operational impacts.We will also closely monitor the humanitarian situation.”
McDonald’s has temporarily closed 108 restaurants in Ukraine and continues to pay full salaries for its Ukrainian employees.The company donated $5 million to its Employee Assistance Fund and continues to support relief efforts led by the International Red Cross in the region.
The financial impact of closing restaurants in Russia and Ukraine is significant for McDonald’s.
Restaurants in the two countries contributed 9%—around $2 billion—of its annual revenue and 3% of its operating income.n n n
Many other brands have faced similar calls to cease operations and business with Russia.Brands such as Apple, Oracle and FedEx have ended business and services and Russia amid the country’s invasion of Ukraine.Other brands such as Coca-Cola and Pepsi have yet to stop their work in Russia despite growing calls from the public.Crisis in Ukraine: How Brands Are Stepping Up to Help.