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Russia can be difficult for fast-food restaurants to break up with

Despite intense public pressure from the U.S. to pull out of Russia over its attack against Ukraine, some fast-food restaurants are having trouble disengaging their brands from Russia.

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Russia can be difficult for fast-food restaurants to break up with

Canada's Restaurant Brands International, the owner of Burger King has stated that it plans to close 800 Russian restaurants. However, Alexander Kolobov (the company's Russian partner) has refused to comply. Exiting business agreements that were established 10 years ago is legal complicated, RBI stated.

"Would you like to immediately suspend all Burger King operations in Russia?" Yes. Can we enforce a suspension today? No. No.

The 15% owned by the RBI and the rest by Kolobov-led investors. The Russian market has been suspended by RBI, which includes operations and marketing support. It has also begun the process to exit its Russian partnerships. According to the company, the company has stopped new investments in Russia and is redirecting any Russian profits to UN refugee agency.

Papa John's also closed its Russian corporate operations, but nearly 200 of its Russian restaurants still sell pizzas, according to the New York Times. Through a franchise agreement, all outlets are majority owned by Russian citizens. Christopher Wynne is an American who lives in Moscow.

Wynne stated that the vast majority of Russians are clear-headed and can see the dire consequences of their situation. "They love a good slice of pizza at the end."

Dunkin Donuts operates 21 Russian franchised stores. The brand , which is based in Canton, Massachusetts, returned to Russia in 2010, after an 11-year absence. Recently, the company informed Yahoo Finance it had stopped all "current development" and investment in Russia. However, it noted that it cannot legally close independent franchises.

According to Jeffrey Sonnenfeld, Yale University management professor, Dunkin Donuts is listed as one of 84 Russian companies that are cutting back. In a co-authored commentary, Sonnenfeld described such moves as "window dressing" and said that the companies "postponed future investments or suspended advertisement while continuing to substantive business operations."

Subway is another fast-food giant that is taking a less hands-off approach. Sonnenfeld describes it as being one of 27 companies that dig in and defy Russia's demands, prompting boycott calls on social networks.

Sandwich maker Subway claimed it would use any profits from Russian operations to support humanitarian efforts. However, the approximately 450 Subway outlets located in Russia are owned by franchisees and managed independently.


 

Subway stated Wednesday in a statement that it doesn't control independent franchisees or their restaurants and has limited insight into their day to day operations.

Russia is a much easier place for McDonald's to exit. Last week, the Golden Arches moved to to temporarily close its 850 restaurants across Russia. It is easier to close down Russian McDonald's restaurants if they are owned by a Chicago-based company.

Starbucks has also frozen Russian business and stopped shipping its products. According to , the coffee chain stated that its licensee had agreed to suspend operations in 130 Starbucks stores in Russia and to continue paying nearly 2,000 workers.


 

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