Prominent companies have announced that they're pulling out of Russia left and right thanks to its invasion of Ukraine, including big names such as Disney, Apple, and BP. But some stragglers remain.
After halting corporate support for its 800 franchised locations in Russia last week, Burger King has announced it is going a step further and divesting its 15% ownership stake in its Russian business. In an open letter to employees, the company explained that it can't shutter Russian locations because of legal matters, so divesting is the next logical step. Burger King's partner in Russia, Alexander Kolobov, is refusing to shut down the restaurants.
Subway, which has 446 restaurants in Russia, has said in a statement that its Russian restaurants are also owned by local franchisees. "We don’t directly control these independent franchisees and their restaurants," the chain says. Instead, it has pledged to donate profits from Russian operations to humanitarian efforts supporting Ukrainians. Still, it has been hit with boycott calls from customers who note that other businesses with franchises in Russia have taken a stronger stand.
An American franchisee of Papa Johns, Christopher Wynne, has also stirred boycott chatter by refusing to shut down his 190 Russian stores even after the company said it would suspend all corporate operations in Russia. “The best thing I can do as an individual is show compassion for the people, my employees, franchisees and customers without judging them because of the politicians in power," he told The New York Times.
Starbucks, with about 130 licensed locations in Russia and Ukraine, also does not directly operate its Russian shops, but has suspended all business there. Yum! Brands, with 1,000 franchised KFC locations and a handful of Pizza Huts, has said it is stopping all corporate support for those restaurants, but some restaurants may remain open, according to the Times.
Under boycott pressure, McDonald's recently said it would shut down all of its 850 Russian stores, but they are corporate-owned, not franchised. Its stores in Russia and Ukraine generated 9% of its revenue in 2021, according to The Washington Post.
Jeffrey Sonnenfeld of the Yale Chief Executive Leadership Institute has been tracking big corporate exits from Russia and noting the major firms that remain. Only about 30 companies, including Subway, remain by Sonnenfeld's count, compared with around 400 that have exited or drastically scaled back operations.