Why is Burger King one of the only Western fast food chains still operating in Russia?

Burger King is still operating as normal in Russia

After Russia invaded Ukraine, many Western brands, including fast food chain McDonalds, pulled out of the country in solidarity with Kyiv.

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However, rival Burger King still has 800 stores open in Russia and one of its owners has admitted it has “no updates” to share about its potential exit.

Why is Burger King still open in Russia?

Russian customers wait in line on the opening day of Russia's first Burger King fast food restaurant in Moscow in 2010.Russian customers wait in line on the opening day of Russia's first Burger King fast food restaurant in Moscow in 2010.
Russian customers wait in line on the opening day of Russia's first Burger King fast food restaurant in Moscow in 2010.

The company, which entered the Russian market late in 2010 – 20 years after the opening of the first McDonald’s in Moscow after the fall of the Iron Curtain saw customers queuing around the block – remains open across the country.

In March last year, one of Burger King’s Russian business owners indicated it was likely to attempt to leave the market, but said it had hit a stumbling block with its franchise operators.

Restaurant Brands International (RBI), which owns 15 per cent of the Russian business, said the company had "started the process" to dispose of its stake and that it would take "some time". However, RBI president David Shear said the chain’s main operator in Russia had "refused" to shut the outlets following the first attacks on Ukraine.

He said last year, however, Burger King had suspended its marketing and supplies to Russia, and redirected its revenues from the country to humanitarian organisations helping Ukrainian refugees.

A spokesperson for the Canadian-American company said this week the firm had no further updates on its exit plans.

The main problem is that RBI only owns a small stake in the business. The joint venture that holds the Burger King franchise in Russia is made up of RBI and three other parties.

One is a Ukrainian investment firm ICU Group, while the other two have strong Russian links.

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Businessman Alexander Kobolov owns a 30 per cent stake in the company and is responsible for operations in the country. Meanwhile, VTB Capital is an affiliate of VTB Bank – Russia's second largest financial institution, which has been sanctioned by the US, UK and other European countries.

Which companies are no longer operating in Russia?

According to analysis published this week by the Yale School of Management’s Yale Chief Executive Leadership Institute, more than 1,000 companies have curtailed operations in Russia.

This includes major brands such as Vodafone, Netflix and Mercedes. Starbucks completely exited Russia by May last year and its outlets were taken over by a Russian-owned chain, called Star. A swathe of McDonald’s outlets were also taken over and operated under a new brand, Vkusno & tochka (‘Tasty and that’s it’).

Which companies are still operating in Russia?

Yale School of Management has graded its list of businesses on a scale from A – when they have not changed operations in Russia at all since the war began – to E, those which have exited entirely.

Communications business BT Group is one of only a handful of British companies on the list of those still operating as business as usual.

Others include, perhaps unsurprisingly, national companies from countries which are aligned with Russia, such as Air China and Air Serbia.

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