Support The Moscow Times!

Burger King Expands Into Crimea After McDonald's Exit

People standing in line at the first Burger King branch to open its doors in Moscow in 2010.

U.S. fast food giant Burger King plans to expand its chain into Crimea, filling the vacuum left when McDonald's pulled out of the peninsula last Friday, citing unspecified supply issues.

Burger King currently has no outlets in Crimea, which has been at the center of tensions between Russia and the West after troops believed to be Russian annexed the formerly Ukrainian territory.    

"We are planning to open in Crimea, but I cannot say when exactly it will happen or how many outlets the company will have," said Burger King Russia CEO Dmitry Medovy on Wednesday, Itar-Tass reported. No-one from Burger King Russia was available to comment on Wednesday afternoon.

Burger King operates about 200 restaurants in Russia. The brand has worked under franchise since 2010, when the first outlet opened in a Moscow shopping mall.  In 2012, Russia's second-largest bank, state-owned VTB, paid $50 million for a 47 percent stake in Burger King Russia, the company that now operates the franchise. In 2013, VTB sold 12 percent of the company to a financial investor, reducing its stake to 36.6 percent, Forbes.ru reported.

Also see: McDonald's Closes Its Doors in Crimea

VTB committed to funnel $100 million into developing the chain, and the new company received exclusive rights to the Burger King brand for two decades, RT reported. Burger King's European arm, Burger King Europe, has a minority stake.

McDonald's, meanwhile, has been in Russia since the Soviet era, opening its first Moscow restaurant in 1990.

On April 4, MacDonald's announced their withdrawal from Crimea, citing "manufacturing reasons independent of McDonald's." The company's three restaurants operated in Simferopol, Sevastopol and Yalta, where the McDonald's building stood under a statue of Lenin, dominating the resort's seafront.

McDonald's, which both owned and operated its Crimean outlets, rather than running them by franchise, denied that politics was behind the closure, but hinted at the logistical difficulties and uncertainty of working in Crimea created by sanctions and the peninsula's incorporation into Russia.

"Like many other multi-national companies, McDonald's is currently evaluating potential business and regulatory implications which may result from the evolving situation in Crimea," the company said in a statement, Reuters reported.

"Due to the suspension of necessary financial and banking services, we have no option but to close our three restaurants in Crimea."

Contact the author at p.hobson@imedia.ru 

Sign up for our free weekly newsletter

Our weekly newsletter contains a hand-picked selection of news, features, analysiss and more from The Moscow Times. You will receive it in your mailbox every Friday. Never miss the latest news from Russia. Preview
Subscribers agree to the Privacy Policy

A Message from The Moscow Times:

Dear readers,

We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."

These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.

We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.

By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more