Burger King is still around in Russia, 18 months after saying they were shutting down

Burger King has certainly sparked a lot of angry nerves by continuing to operate in Russia, more than a year after the owner made a pledge to withdraw its shops from the country.

What

Approximately 800 Burger King branches are still in operation in Russia, despite Restaurant Brands International (RBI), which holds a 15 per cent stake in the fast-food chain, previously promising to close these outlets.

About 18 months ago, RBI declared that Burger King would no longer conduct business in Russia amid pressure to exit the country due to the outbreak of the Russia-Ukraine war.

In March 2022, RBI President David Shear announced that they would commence the process of disposing of their ownership stake. He emphasized that this would be a time-consuming task due to the specific terms outlined in the joint venture agreement.

Why the delay?

• According to the RBI President, the main operator of Burger King Russia, Alexander Kolobov, was instructed to cease all operations in the country, which he refused.

• According to a BBC report, Kolobov stated that he only holds a 30% stake in the Russian business of Burger King and lacks the authority to make such a significant decision.

• Kolobov mentioned that decisions of this magnitude require approval from all the partners involved.

• The 800 outlets of Burger King employ approximately 25,000 workers who would lose their jobs if they were to close, and the companies involved are hesitant to rush the process.

Burger King Russia partnership deal

According to both the parties (RBI and Kobolov), the main reason for this 18-month delay is due to the complex legal arrangements between all the partners involved in Burger King’s Russian business. 

Burger King operates in Russia through a collaborative partnership between

• Mr Kolobov, as the primary day-to-day manager of the company, 
• Russia's VTB Capital 
• An unknown Ukrainian investment company.

The blame for the delay is entirely attributed to the problematic partnership structure among these companies. RBI has not provided any new updates on the matter, and the exact time for Burger King to cease operations in Russia remains uncertain.