McDonald's Might Sell out to Govor

McDonald's Might Sell out to Govor


After the start of Russia's special military operation in Ukraine, many foreign businesses left our country. The McDonald's fast food corporation was among them.

Back on March 14, all 850 restaurants of this not-so-popular brand were closed in Russia. On May 16, this surprisingly popular institution of public catering in Russia reported that McDonald's intends to sell its entire “restaurant portfolio” in our country to “local buyers.”

The fast-food company stated that the “humanitarian crisis” caused by the events in Ukraine, as well as the “acceleration of uncertainty in the business environment” led McDonald's to conclude that further ownership of the business in Russia was no longer “appropriate” and did not correspond to the company's values. McDonald's representatives underlined that the new owner could not use the logo, name, branding and menu, but this would not prevent McDonald's from keeping its trademarks in Russia. The fast-food company made it clear that they would make sure that “employees would not lose” their jobs under the new owner.

The day before it became known that McDonald's was selling its business in Russia to entrepreneur Alexander Govor, who is being positioned in the domestic business community as a 62-year-old oligarch from Kuzbass. Govor is the largest franchisee of this American company in our country. For example, 25 fast food restaurants in Siberia belong to the company GID from Novokuznetsk, which was established on purpose in 2014 to manage the McDonald's chain, and its sole founder is precisely the “oligarch from Kuzbass” Alexander Govor.

So, these restaurants will reopen in Russia as early as June. It is noteworthy that the entire assortment will remain, but the names of the dishes sold in the restaurants will be different. As the head of the Ministry of Industry and Trade Denis Manturov assured the public, the state will assist the new owner in setting up operations.

Recall that McDonald's is not the first fruit to return to our country in a “new guise.” After February 24, about 200 Western companies announced their withdrawal from Russia or slowed down their work in our country. However, in many cases, this turned out to be empty words, because at least 35 foreign brands may come back to Russia in the near future.

At the moment, some companies have started looking for buyers for Russian segments of the business. For example, the Danish Carlsberg Group is going to sell its Russian assets to the Turkish Efes, and the famous Dutch brand Heineken is also looking for a buyer. The German firm OVI is transferring its assets in Russia to a local investor, and its first stores with the “old” filling have already opened in Moscow.

The Finnish concern Valio sells Russian assets and the Viola brand to Velcom. France's Renault is transferring 68% of AvtoVAZ's capital to NAMI and its stake in the Renault-Russia plant to the Moscow government.

The German company Kontinental in Kaluga just took and resumed production of tires, and Canadian Colliers International changed its brand to Nikoliers and returned to the consulting market. Spanish Inditex (brands Zara, Bershka, Massimo Dutti, Stradivarius, Utergue, Pull & Bear and Ousho) plans to reopen, but the timing is still unknown, and a Japanese retail chain of casual clothing “for everyone” Uniqlo is going to start work in August this year.

The American film company Warner Bross also intends to return, although it is not yet known when and what the new conditions will be in the new reality. Moreover, even some IT corporations (Microsoft, IBM, and Adobe), which publicly refused to work in Russia, later announced the “preservation of product support” in schools, hospitals, and social infrastructure facilities. By the way, IKEA is likely to return with a full range of its products after “adjusting its logistics” to Russia as well.

Most of the foreign companies that have left the Russian market have actually sent their employees on paid or unpaid leave. So, all of these firms will either gradually go back to work, or have already returned. After all, they all have staff, and as for the rent of retail outlets, it is still being paid. So, the prospect of losing the Russian market and the investment spent on its development, of course, cannot please all these megacompanies, and sometimes they come back. Business is business, don't take it personally.

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