Fast-food chain Burger King, with around 800 fully franchised outlets in Russia, has decided to pause all corporate support within the country, joining other companies taking similar retaliatory measures following Moscow’s incursion into Ukraine.
"The business is fully franchised and managed by a local master franchisee. Burger King has suspended all of its corporate support for the Russian market, including operations, marketing, and supply chain in addition to refusing approvals for investment and expansion,” the company stated.
Earlier, RBI had announced that it would redirect profits earned from franchised operations in Russia toward humanitarian efforts, beginning with a $1 million donation to the United Nations High Commissioner for Refugees (UNHCR).
Burger King committed $3 million to support Ukrainian refugees. The brand also announced that its franchises in more than 24 European nations will partner with local nongovernmental organizations to distribute free meal vouchers worth $2 million to the refugees.
Several other American fast-food outlets already announced pausing operations in Russia. Burger King’s rival, McDonald’s, declared a temporary closure of all restaurants and halted operations in the country.
McDonald's has around 850 locations in Russia, with a majority being owned by the company. This means that McDonald’s is poised to suffer heavy losses by ceasing operations there.
The boycott will cost the company roughly $50 million a month, McDonald’s CFO Kevin Ozan said at the recent UBS Global Consumer and Retail Conference.
“We expect this to be temporary, and we certainly don’t take this decision lightly. But for us, this is about doing what we think is the right thing to do, both for the global business and for our people locally,” Ozan said.
McDonald’s pledged to continue paying the roughly 62,000 employees who live and work in Russia during the work stoppage. The company will also pay employees' leases and other expenses.
PepsiCo Inc. has suspended the sales of Pepsi-Cola, Mirinda, and 7UP soft drinks in Russia, and the company will cease all advertisement and promotional activities, as well as capital investments, in the country. However, PepsiCo Inc. said it will continue offering other products such as baby food and dairy products.