Restaurants | BBC: Burger King still operates in Russia, even though its parent company announced it was leaving

Fast food chain Burger King restaurants still operate in Russia, even though the chain announced that it would leave the country already in early 2022, says the British Broadcasting Company BBC.

Many Western companies have pulled out of Russia since the country launched a full-scale war of aggression in Ukraine in February 2022.

Burger King’s parent company Restaurant Brands International (RBI) has said before, that its departure from Russia is hampered by the franchise business. According to the company, the operator running the business in Russia does not agree to close restaurants.

RBI owns 15 percent of Burger King franchise operations in Russia.

The other owners are businessmen Alexander Kolobov (30 percent), Ukrainian investment fund ICU Group (35 percent) and VTB Capital, a subsidiary of Russia’s second largest financial institution VTB Bank.

State-owned VTB Bank is subject to Western sanctions.

of RBI Chairman of the Board David Shear said in March 2022 that the company had “started the process” of divesting its 15 percent stake. However, according to Shear, giving up would take time.

The RBI now tells the BBC that it has nothing new to report at the moment about its exit from Russia or what developments have taken place in relation to the divestment.

The company says that it does not make new investments in the Russian market and does not offer, for example, support to the Russian supply chain. Also, according to its own words, it has not made a profit from Burger King’s restaurants in Russia after the beginning of 2022.

Yale university researcher Steven Tian tells the BBC that he considers franchise agreements a convenient excuse for companies to continue operating in Russia. Tian works in a research group that monitors companies’ ways of responding to Russia’s war of aggression in Ukraine.

Tian points out that, for example, Starbucks has managed to leave Russia.

“By continuing the business for a year and a half [Venäjän presidentin Vladimir] Putin’s after the start of the attack [RBI] feeds Putin’s regime,” he says.

the BBC interviewed by a legal expert by David Bond according to RBI’s 15 percent ownership makes it difficult for the company to leave Russia, as it cannot force other shareholders to do as they please.

According to Bondi, companies that have entered into a franchise agreement may face legal consequences or reputational harm from breaking the agreement.

However, he also says that there is nothing in itself to stop the RBI from terminating the franchise if it wanted to do so. Termination of the contract would not necessarily prevent the continuation of the use of the Burger King brand in Russia.