It may be years — or never — before McDonald’s reopens in Russia

The era of the Big Mac in Russia may be over for years and possibly for good — even if the war in Ukraine ends in the coming weeks or months, experts tell The Post.

McDonald’s, which opened 850 restaurants in Russia over the past three decades, temporarily closed them all this month because of the war in Ukraine. Now, as the Russian government threatens to forcibly reopen them, the fast-food giant looks increasingly unlikely to rebuild itself in Russia, experts say.

Just four days after McDonald’s announced its store closures, a trademark filing was made in Russia for a knockoff burger chain called “Uncle Vanya,” whose red and yellow logo looks like a sideways Golden Arches.

The application — which neither the company nor Russian officials have yet commented on officially — came on the heels of Russian officials advocating for the removal of patent protections for companies linked to countries deemed hostile to Russia.

“Putin and his cronies are not going to follow international laws or norms,” said Edward Rensi, a former president and chief executive of McDonald’s in the 1990s when the company opened its first restaurant in Moscow. “I think it’s very probable that McDonald’s will not reopen — and if they do it’ll be 10 or 15 years.”

McDonald’s is paying its 66,000 employees in Russia even while the stores are closed.
AFP via Getty Images

A key question is when Vladimir Putin’s regime winds down — and whether the one that succeeds it actively seeks to rebuild diplomatic ties with the US, according to experts.

Web Search Engine

“The big question for me is how does this end? I don’t think the western corporations rush to reopen in Russia if Russia and Ukraine reach a peace deal,” said Tim Fenton, a former chief operating officer for McDonald’s who also headed up the company’s Middle Eastern business, including Turkey and Greece.

To be sure, dozens of corporations have already announced plans to permanently leave Russia, including PwC, Accenture, Uber and TJMaxx. There is also the question of how Russia will fight back against these efforts, including its threat to seize the assets of foreign entities that have left the country.

“If this situation gets resolved,” restaurant analyst Mark Kalinowski said, “I think a lot of industries might give it some hard thought as to whether they want to operate in such a country.”

Diners sitting at tables inside a McDonald's restaurant in a shopping mall.
A McDonald’s restaurant at a shopping mall in Russia.
Getty Images

Russians have become huge fans of the McD’s brand as evidenced by the long lines at the restaurants before they were set to close and the demand for the menu items on the secondary market, where Russians were hawking Big Macs for the equivalent of $44.

Still, it’s not clear how feasible a Russian-operated McDonald’s would be, experts say. While most of the menu items are produced in Russia at manufacturing facilities that McDonald’s set up many years ago, there are still some ingredients that are imported into the country that have become impossible to get while sanctions are in place.

What’s more, it would be difficult to procure the exact products that contribute to the signature taste of McDonald’s French fries, Big Macs, buns, sauces and other menu items without the corporation’s assistance.

Russia “would still need to set up a supply chain and I’d guess they’d need to [come up with their own] formula for a Big Mac sauce,” said Jim Lewis, a franchisee who formerly ran McDonald’s outlets in the US.

Big Mac boxes being served on a silver tray.
Russian consumers have become big fans of the fast food chain since the first one opened in Moscow in 1990.
AFP via Getty Images

At the moment McDonald’s has said it will pay its 66,000 Russian employees even while the stores are closed. The fast food giant owns 84% of its restaurants and has said the cost to support its workforce there and other expenses will amount to $50 million a month.

There are still 136 McDonald’s stores in Russia that are not owned by the company, but rather franchisees. Those are the ones that likely are among the stores that haven’t yet closed, as per McDonald’s edict.

“The reality is that Putin could order the McDonald’s workers back to work and order them to run it,” Rensi said, “But will the people be willing to do it and does the government have a list of all the employees?”

A view of a McDonald's restaurant in Moscow from the outside window.
Most of the menu items are produced in Russia and local manufacturing facilities.
Getty Images

McDonald’s declined to comment for this story.

The original McD’s restaurant in Moscow, a massive 23,000 square foot eatery that seated 700 customers, was set up by the company’s Canada operation in 1990 because the Russian government was still angry over president Carter’s decision to boycott the 1980 summer Olympics in Russia, said Rensi, the former corporate CEO.

“There were 27,000 job applications for that store and we had people who had PhDs who were applying, because Russia’s economy was in terrible shape then,” Rensi said.

Artmotion U.S.A

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button