CHICAGO – Russia’s invasion of Ukraine has led the management of McDonald’s Corp. to determine that ownership of its business in the country is no longer tenable or consistent with the company’s values. The company is currently pursuing the sale of its entire portfolio of restaurants in the country to a local buyer.
The company intends to initiate the process of “de-arching” those restaurants, which entails no longer using the McDonald's name, logo, branding, and menu, though the company will continue to retain its trademarks in Russia. Management said its priorities include seeking to ensure the employees of McDonald’s Russia continue to be paid until the close of any transaction and that employees have future employment with any potential buyer.
“We have a long history of establishing deep, local roots wherever the arches shine,” said Chris Kempczinski, president and chief executive officer. “We’re exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees. Their dedication and loyalty to McDonald’s make today’s announcement extremely difficult.
“However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there.”
As a result of its exit from Russia, McDonald’s expects to record a charge, which will be primarily non-cash, of approximately $1.2 billion to $1.4 billion to write off its net investment in the market and recognize significant foreign currency translation losses.
McDonald’s restaurants in Ukraine remain closed and employees continue to receive full salaries, according to the company.The Russian and Ukrainian markets combined represented approximately 2% of McDonald’s systemwide sales in 2021.