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McDonald's: fast out of Russia

This week, what was recognised as Russian Mcdonald’s has submitted patent applications for a new name and branding in the country. This comes as the American company, with over 800 franchises in the country, completes its drawdown in the country after a presence of thirty years.


The ten new names submitted include Fun and Tasty, The Same One, Exactly It, Only So and Compass. It has also been reported in Russian media outlets that the regeneration of the restaurants would commence on 12th June with the currently unchanged McDonald’s restaurants reopening under new ownership.


Currently, the only locations where Russians can enjoy the fast food of the world’s biggest burger chain are at airports and train stations.


 


The new McDonald’s of Russia will be owned by entrepreneur Alexander Govnor. There has been speculation about some level of crossover between the new brand and its predecessor. This may be seen in the use of Latin letters Mc or M in branding, either attributing to the crossover period or to profit off the previous success of the brand.


Furthermore, the ombudsman for the restaurant industry in Moscow, Sergei Mironov, was reported in Russian media as saying “It's not going to be a Big Mac, it's going to be a Big Mick. Conditionally, they will change something. A hamburger - it will still be a hamburger. A cheeseburger is a cheeseburger… It’s a cheeseburger all over the world, not just in The Mac," he said. The quote suggests that key items from the predecessor's menu will remain but probably under new names, giving hope to Russian fans of the restaurant.


The trigger for all of this change has been the war in Ukraine, which has sparked outrage from the Western world with hundreds of European and Western brands, once commonplace in major Russian cities, leaving the country. The list has included not only McDonald’s but also Ikea, Adidas, Starbucks and Coca Cola, acting in the face of corporate responsibility and pressure from the West not to fuel the Russian war machine.


While many companies have pulled out, their exit has not been as swift as McDonald's, hoping to return to the country soon. Ikea is still paying its workers and will continue to do so until August at the earliest (an extension from a previous agreement). 


However, for McDonald’s, the incentive to 'up-sticks' in Russia may be down to more than just ethical reasoning. The company is not only a fast-food chain but a real-estate giant across the globe, leasing thousands of properties to franchisees. Therefore, the recent instability in terms of markets and assets has significantly diminished confidence in not only Ukraine but in Russia also. The ruble remains an unstable currency and the banking sanctions from both Russia and the West make operating properties in Russia more unfavourable. Getting out now, only a handful of months after the invasion began, shows that McDonald’s wants to protect its portfolio arguably more than show any great solidarity to Ukraine.


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Tags: Russia War Ukraine Sanctions



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