McDonald’s is selling its business in Russia to its current licensee Alexander Govor and the restaurants would operate under a new brand, ending more than three decades of presence in the country following the invasion of Ukraine.
The world’s largest burger chain owns about 84% of its nearly 850 restaurants in Russia and became one of the biggest global brands to leave the country earlier this week, though it said it would keep its trademark.
Govor, who runs the franchise operation through his firm GiD LLC, has been a McDonald’s licensee since 2015 and helped the burger chain expand into remote Siberia, where it operates 25 restaurants.
McDonald’s and GiD declined to disclose the financial terms of the deal. The burger chain had said it would take a non-cash charge of up to $1.4 billion after a sale.
The agreement with Govor provides for retention of employees for at least two years on equal terms, McDonald’s said today.
It would pay the salaries of corporate employees in 45 regions of the country until the sale closes, which is expected in the coming weeks.
Russian Trade and Industry Minister Denis Manturov said the deal was the result of a “long and difficult” negotiation process and the government would provide Govor with all necessary assistance to set up operations.
Earlier in the day, a local media report said one of the largest US fast food chain franchise operators in Russia, SPP, was a potential buyer.
Its owner, Kairat Boranbayev, runs a McDonald’s franchise in Kazakhstan and Belarus.
McDonald’s had decided in March to close its restaurants in the country, including the iconic Pushkin Square location in central Moscow, a symbol of burgeoning American capitalism in the dying embers of the Soviet Union.
Several other Western brands, including Imperial Brands and Shell, have also agreed to sell their Russian assets or hand them over to local managers.