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McDonald’s sells its Russian restaurants, ending an era

Fast food giant closes deal on 850 sites with Siberia franchise operator Alexander Govor, who agrees to retain 62,000 employees for next 2 years; exit prompted by Ukraine invasion

Hundreds of Soviets and almost as many correspondents crowded around the first McDonald's in the Soviet Union on its opening day in Moscow on January 31, 1990. (AP Photo/Rudi Blaha, File)
Hundreds of Soviets and almost as many correspondents crowded around the first McDonald's in the Soviet Union on its opening day in Moscow on January 31, 1990. (AP Photo/Rudi Blaha, File)

AP — McDonald’s has begun the sale of its restaurants in Russia 30 years after the burger chain became a powerful symbol of the easing of Cold War tensions between the United States and the Soviet Union.

The Chicago burger giant said its existing licensee Alexander Govor, who operates 25 restaurants in Siberia, has agreed to buy McDonald’s 850 Russian restaurants and operate them under a new name. McDonald’s did not disclose the terms of the sale.

McDonald’s was among the first Western consumer brands to enter Russia in 1990. Its large, gleaming store near Pushkin Square in Moscow signaled a new era of optimism in the wake of the Cold War shortly after the fall of the Berlin Wall.

The company shuttered its Russian locations in March because of Russia’s invasion of Ukraine, a decision the company said cost it $55 million per month. On Monday, McDonald’s announced it would sell those stores and leave Russia.

It’s the first time the company has “de-arched,” or exited a major market. It plans to start removing golden arches and other symbols and signs with the company’s name. McDonald’s said it will also keep its trademarks in Russia and take steps to enforce them if necessary.

The sale announced Thursday is subject to regulatory approval and is expected to close within a few weeks, McDonald’s said.

A McDonald’s restaurant is seen in the center of Dmitrov, north of Moscow, Russia, on December 6, 2014. (AP Photo/File)

Govor, a licensee since 2015, has also agreed to retain McDonald’s 62,000 Russian employees for at least two years on equivalent terms. Govor also agreed to pay the salaries of McDonald’s corporate employees until the sale closes.

McDonald’s left open the possibility that it could one day return to Russia.

“It’s impossible to predict what the future may hold, but I choose to end my message with the same spirit that brought McDonald’s to Russia in the first place: hope,” CEO Chris Kempczinski wrote Monday in a letter to employees. “Thus, let us not end by saying, ‘goodbye.’ Instead, let us say as they do in Russian: Until we meet again.”

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