Several restaurant chains vowed to pull support from their locations in Russia or pull out altogether in response to the country’s invasion of Ukraine.
But that doesn’t mean the chains’ Russia problems are over.
According to the Wall Street Journal, Russia has threatened to arrest corporate leaders who criticize the government or seize assets of companies that withdraw from the nation. Among the companies that have received such warnings: McDonald’s and Yum Brands, whose respective moves last week helped usher in a wave of restaurant chains that vowed to exit the market.
That report followed earlier reports saying Russia would eliminate trademark protections for companies from “unfriendly countries,” according to the Washington Post. One of the unfriendly countries is the U.S.
The moves threaten to add to chains’ potential problems arising from the Russian invasion of Ukraine and the response of western corporations. More than 300 U.S. companies have vowed to pull out of the country or stop investing there, including several restaurant chains with major holdings in the nation.
The dual threats mean that these companies could lose their trademarks in the country, which in recent years has been a growth market for many U.S. brands. Burger King, McDonald’s and Yum’s KFC all have 800 or more locations there.
Josh Gerben, a trademark attorney, told the Washington Post that Russia could allow local operators take over McDonald’s closed restaurants. That could potentially damage the quality of the trademark, something McDonald’s has worked for years to perfect.
McDonald’s would not comment for the story and a representative for Yum Brands did not respond to a request for comment.
The threats from Russia and its president, Vladimir Putin, promise to keep the issue top-of-mind for some of the world’s biggest restaurant chains.
They found themselves thrust into the global discussion not long after Russia invaded Ukraine in February. The U.S. and many European countries levied economic sanctions on Russia for its actions and, shortly thereafter, many western businesses vowed to stop doing business there. Social media soon turned its attention to McDonald’s, whose 1990 opening in Moscow is viewed as a seminal event in the opening of Russia to western-style capitalism.
The Chicago-based burger giant acquiesced to those concerns last week, opting to close its restaurants in Russia—it operates most of the chain’s nearly 850 locations in the country. But McDonald’s opted to continue paying its 62,000 employees in the nation, a move viewed as one to maintain its reputation among the people of the country.
Other companies soon followed suit. That includes Yum Brands, owner of KFC and Pizza Hut. The company said it would close company-operated restaurants in Russia and convinced its Pizza Hut operator to close its restaurants there.
Several other brands either pulled support for its restaurants or vowed to donate profits earned in the country, including Starbucks, Papa Johns, Burger King and Subway.
Russia has been making growing noise about responding, however. Russia’s Ministry of Economic Development was examining the removal of restrictions on intellectual property, the country’s state-owned news agency Tass reported last week.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.