WORLD NEWS

Burger King business partner ‘refuses’ to close 800 Russian restaurants

Mar 21, 2022, 11:22 AM | Updated: Jun 8, 2022, 3:17 pm
DALY CITY, CALIFORNIA - FEBRUARY 15: A sign is posted in front of a Burger King restaurant on Febru...
DALY CITY, CALIFORNIA - FEBRUARY 15: A sign is posted in front of a Burger King restaurant on February 15, 2022 in Daly City, California. Restaurant Brands International, the parent company of Burger King, reported strong fourth quarter earnings that beat analyst expectations with revenue of $1.55 billion. (Photo by Justin Sullivan/Getty Images)
(Photo by Justin Sullivan/Getty Images)

(CNN) — Burger King is trying to suspend its operations in Russia, but that’s proving difficult. A business partner controlling 800 restaurants has “refused” to close them, the company said.

The burger chain, owned by Restaurant Brands International, has a joint venture partnership with businessman Alexander Kolobov in Russia. RBI controls just 15% of its Russian Burger King business, and Kolobov is responsible for the “day-to-day operations and oversight” of its locations in the country.

That means Burger King can’t just snap its fingers and close up shop.

“We started the process to dispose [of] our ownership stake in the business,” said David Shear, president of RBI’s international operations, in an open letter. “While we would like to do this immediately, it is clear that it will take some time to do so based on the terms of our existing joint venture agreement.”

McDonald’s, by contrast, owns more than 80% of its restaurants in Russia outright. That made exiting the country significantly easier.

Shear said that RBI has “demanded” that the joint venture immediately close the Burger Kings, but Kolobov has “refused to do so.”

Burger King entered Russia about a decade ago, operating the joint venture with Kolobov, Investment Capital Ukraine and VTB Capital, a Russian bank that has been hit with sanctions.

Shear explained that a “complicated legal process” is preventing it from shutting down the partnership and businesses.

“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,” Shear said. “No serious investor in any industry in the world would agree to a long-term business relationship with flimsy termination clauses.”

Last week, Burger King pulled corporate support from its businesses in Russia, including suspending operations, marketing and supply chain assistance.

This issue highlights the problems some Western companies and banks face in pulling out of Russia, complicated by joint ventures or partnerships that they don’t have complete control over. For example, a Papa Johns franchisee in Russia refused to close about 200 locations even after the pizza chain suspended corporate support for it.

The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

Top Stories

World News

NATO Secretary General Jens Stoltenberg holds the closing press conference at NATO headquarters dur...
SAMUEL PETREQUIN, Associated Press

NATO to boost rapid reaction force, Ukraine military support

NATO chief says alliance aims to boost rapid reaction force numbers from the current 40,000 to over 300,000.
9 hours ago
(Gustavo Petro/El Espinal via CNN)...
Associated Press

4 killed when stands collapse during Colombian bullfight

Part of the wooden stands have collapsed during a bullfight in central Colombia, sending spectators plunging to the ground and killing at least four people and injuring hundreds.
9 hours ago
A destroyed home in Ukraine...
Kiersten Nunez

Local nonprofit aims to fix lost homes in Ukraine

The nonprofit August Mission hopes to raise enough money to rehouse Ukrainians who lost their homes during the conflict against Russia.
1 day ago
(FILES) This file aerial shot taken on September 15, 2010 shows the disputed islands known as Senka...
Junko Ogura and Simone McCarthy, CNN

Japan says Chinese coast guard ships in longest violation of its territorial waters in a decade

Two Chinese coast guard ships navigated Japan's territorial waters near a chain of disputed islands for more than 64 hours this week
1 day ago
South African authorities are investigating the deaths of at least 17 people at a tavern in East Lo...
CNN's Teele Rebane, Eyad Kourdi and Reuters

Children as young as 13 among 22 killed in South African tavern incident

South Africa was on Sunday mourning the deaths of 22 young people -- some of them as young as 13 -- at a tavern in East London.
1 day ago
The eastern Ukrainian city of Severodonetsk is now "completely under Russian occupation," according...
Tim Lister, Oleksandra Ochman, Olga Voitovych and Jeevan Ravindran, CNN

Ukrainian city of Severodonetsk now ‘completely under Russian occupation’ after months of fighting

The eastern Ukrainian city of Severodonetsk is "completely under Russian occupation," the city's head of military administration said Saturday, following months of grueling and bloody fighting.
2 days ago

Sponsored Articles

hand holding 3d rendering mobile connect with security camera for security solutions...
Les Olson

Wondering what security solutions are right for you? Find out more about how to protect your surroundings

Physical security helps everyone. Keep your employees, clients, and customers safe with security solutions that protect your workplace.
Many rattan pendant lights, hay hang from the ceiling.Traditional and simple lighting....
Lighting Design

The Best Ways to Style Rattan Pendant Lighting in Your Home

Rattan pendant lights create a rustic and breezy feel, and are an easy way to incorporate this hot trend into your home decor.
Earth day 2022...
1-800-GOT-JUNK?

How Are You Celebrating Earth Day 2022? | 4 Simple Ways to Celebrate Earth Day and Protect the Environment

Earth Day is a great time to reflect on how we can be more environmentally conscious. Here are some tips for celebrating Earth Day.
Get Money Online...

More Ways to Get Money Online Right Now in Your Spare Time

Here are 4 easy ways that you can get more money online if you have some free time and want to make a little extra on the side.
Lighting trends 2022...

Lighting Trends 2022 | 5 Beautiful Home Lighting Trends You Can Expect to See this Year and Beyond

This is where you can see the latest lighting trends for 2022 straight from the Lightovation Show at the Dallas World Trade Center.
What Can't You Throw Away in the Trash...

What Can’t You Throw Away in the Trash? | 5 Things You Shouldn’t Throw in to Your Trash Can

What can't you throw away in the trash? Believe it or not, there are actually many items that shouldn't be thrown straight into the trash.
Burger King business partner ‘refuses’ to close 800 Russian restaurants