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Burger King says Russia franchisee ‘refused’ to suspend operations

(Photo: Gallo Images / OJ Koloti)

Burger King's parent company said on Thursday it has not been able to close its 800 restaurants in Russia because its independent operator there ‘refused' to do so.

Restaurant Brands International said that to enforce its contracts with the franchisee, Alexander Kolobov, it would need the help of the Russian government, but “we know that will not practically happen anytime soon”, according to a letter to employees from David Shear, president, international, of the company.

It was not immediately clear how to reach Kolobov for comment.

Shear’s long letter highlights the many complications bedeviling some American fast-food brands as they try to halt operations in Russia following Moscow’s invasion of Ukraine.

Restaurant Brands entered Russia a decade ago through a joint venture partnership with entities controlled by Kolobov. Restaurant Brands owns a 15% stake in the joint venture, Shear said.

The company has started the process to dispose of its ownership stake. It wants to do so immediately, Shear said, but it will take “some time” based on the terms of the agreement.

There are “no legal clauses that allow us to unilaterally change the contract or allow any one of the partners to simply walk away or overturn the entire agreement”, Shear wrote.

“Would we like to suspend all Burger King operations immediately in Russia? Yes. Are we able to enforce a suspension of operations today?” he wrote. “No.”

(Reporting by Hilary Russ in New York. Additional reporting by Praveen Paramasivam in Bengaluru. Editing by Devika Syamnath and Leslie Adler.)

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