A McDonald’s restaurant in St.Petersburg, Russia.
Peter Kovalev | TASS | beautiful pictures
McDonald’s hope its russian stopped working will cost the fast food giant about $50 million a month until it reopens its restaurants there.
The Chicago-based company announced Tuesday that it will temporarily close locations in Russia such as Putin’s forces continue to attack Ukraine. McDonald’s has about 850 locations in Russia, the majority of which are owned by the company, not by franchisors.
Other US restaurant companiesconsists of Starbucks, Brand Yum and Papa John’s following McDonald’s, as well as its soft drink supplier, Coca-Cola. Because most of its restaurants in Russia and Ukraine are company-owned, McDonald’s has a greater reach than most other American fast-food chains with locations in those markets. The burger chain has been criticized for keeping quiet about the war until it announced its closure.
McDonald’s CFO Kevin Ozan said at the UBS Global Consumer and Retail Conference on Wednesday that the company is still calculating the impact on its business. However, the company now estimates that it will cost about $50 million per month, or about 5 cents to 6 cents per share. For comparison, McDonald’s fourth quarter net income report $1.64 billion and earnings per share of $2.18.
The company has pledged to pay all of its approximately 62,000 Russian employees during the closure of the restaurant. Ozan said McDonald’s will also pay for the location’s rent, as well as supply chain and other costs.
“We think this is temporary and we certainly don’t take this decision lightly, but for us it’s about doing what we think is the right thing to do, for the entire business. for and for the local people,” Ozan said.
McDonald’s has long played an iconic role in Russia. The chain opened its first location in the Soviet Union 32 years ago in Moscow, months before the collapse of the state.
In addition to temporarily closing locations in Russia, McDonald’s has also closed 108 restaurants in Ukraine at the moment. Russia and Ukraine together account for about 2% of total system revenue, 9% of revenue and 3% of McDonald’s operating income.
On Tuesday, Starbucks said it might suspend all business in Russia, and its licensees there agreed to temporarily close all of its cafes. Like McDonald’s, the coffee chain will continue to pay 2,000 Russian workers while its cafes are closed. Starbucks CEO Kevin Johnson condemned the Russian invasion on Friday.
Yum announced it is suspending all operations of its company-owned KFC locations in Russia and is finalizing an agreement with its main Russian franchisee to suspend all Pizza Hut restaurant operations. in which. It has said it will suspend Russian investment and new restaurant development. Nearly all of Yum’s approximately 1,050 locations in Russia are operated by franchisors.
And Papa John’s said on Wednesday that it was suspending all of the company’s operations in Russia, where a primary franchisee controls operations and owns the supply chain for the restaurants. The pizza chain does not currently receive any royalties from those franchised locations.
