McDonald’s to sell Russian arm to local businessman

McDonald’s has announced it has initiated a process to sell its Russian business, having entered into a sale and purchase agreement with its existing licensee, Alexander Govor.

Last week (16 May), Mcdonald’s announced that it will exit the Russian market after more than 30 years of operations in the country.

Under the agreement, Govor will acquire McDonald’s entire Russian restaurant portfolio, consisting of 850 sites, and operate them under a new brand. 

Additionally, the agreement includes the retainment of employees for at least two years.

Govor has also agreed to fund the salaries of corporate employees who work in 45 regions of the country until closing, as well as fund existing liabilities to suppliers, landlords and utilities.

However, Mcdonald’s said the agreement remains subject to certain conditions, including regulatory approval, with closing expected to occur in the coming weeks.

Govor is a co-founder of Neftekhimservice, a refining company, and a board member of another firm that owns the Park Inn hotel and private clinics in Siberia.

Since 2015, he has served as a McDonald’s licensee and has operated 25 restaurants in Siberia.

McDonald’s said the humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, had led the company’s conclusion that continued ownership of the business in Russia is “no longer tenable, nor is it consistent with McDonald’s values”.