Burger King said it can't legally suspend operations in the Russian market right away because of its 15% stake in the business.
The Restaurant Brands International chain announced last week it was suspending corporate support for its 800-plus franchised locations in Russia in response to the attacks on Ukraine. The suspension includes refusing approvals for further investment or expansion.
The structure of the company's Russian business makes it hard for it to close restaurants in the market like some of its competitors, according to an open letter written by the company's International President.
Is it possible to suspend all Burger King operations in Russia? Yes. Is it possible to enforce a suspension of operations today? Shear said no.
Burger King entered Russia through a joint venture with Alexander Kolobov, Investment Capital Ukraine and VTB Capital, which has been hit by U.S. sanctions as an affiliate of a major Russian bank.
Shear said that Burger King demanded the suspension of their restaurant operations in Russia, but that the head of operations refused.
None of the partners have a majority stake in the joint venture. Burger King can't immediately shut down its business on its own.
There are no legal clauses that allow us to change the contract or allow one of the partners to walk away.
Shear said that it will take some time to get out of the joint venture because of the terms of the agreement. He said that Burger King is in full compliance.
The ongoing conflict and tensions with the West make it unlikely that Burger King will be able to enforce its contract.
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