MOSCOW, Russia: McDonald's has announced that it will sell all its branches in Russia to one of its local licensees, businessman Alexander Govor, who will operate the fast food restaurants under a new name.
After Vladimir Putin launched his February invasion of Ukraine, McDonald's temporarily closed hundreds of outlets across Russia, costing it some $55 million per month.
This week, the company said the humanitarian crisis caused by the invasion and the unpredictable operating environment, meant running restaurants in Russia was "no longer tenable" or "consistent with McDonald's values," therefore it would sell its Russian stores and leave the country.
McDonald's also said Govor, who operates 25 restaurants in Siberia, agreed to buy all 850 Russian McDonald's branches and run them under different branding.
Subject to regulatory approval, the sale is expected to close within weeks, it added.
McDonald's was among the first western consumer brands to enter Russia in 1990, and its branch near Pushkin Square in Moscow, which opened shortly after the fall of the Berlin Wall, signaled a new era of optimism at the end of the Cold War.
It is unclear if other U.S. chains will follow McDonald's actions and leave Russia. McDonald's owned 84 percent of its Russian stores, giving it more control over operations than many of its rivals, whose stores are owned by franchisees.
However, the company left open the possibility that it could return to Russia one day.
In a letter to employees, chief executive Chris Kempczinski said, "It is impossible to predict what the future may hold, but I choose to end my message with the same spirit that brought McDonald's to Russia in the first place, hope."