When will McDonald’s open in Russia under a new brand?

It’s happening: McDuck is finally closed. The American company announced the sale of the Russian company. McDonald’s removes the logo, restaurant names and menus. The network buyer is going to open new facilities with a new brand. Fintalk explains what will happen to the other “big three” fast food and whether the old restaurant with a new label will interest french fries lovers.

No more McDuck

While the Russians are bored without the usual brands and resell IKEA sharks to Avito for a lot of money, outgoing foreign companies are trying to make at least some profit from their Russian businesses. Some have indeed invested in the Russian Federation for decades.

The most popular restaurant chain in Russia, McDonald’s (for which other sandwich are people willing to stand in line the day the restaurant closes) is waiting from March to be able to continue operating in Russia without risking fame. But on May 16 he announced: that is, καραπουζίκι, the brand leaves Russia and sells its business to a local buyer. This company, whose name has not yet been announced, will not be able to use the McDonald’s logo, name and menu.

TASS, citing an “in-company” source, assures that McDonald’s will continue to operate in Russia under a new brand in mid-June, retaining the team, restaurant chain, suppliers and menu.

The restaurants will definitely lose their yellow arches at the entrance and everything that connects them externally with the McDonald’s brand. Inside, technology, equipment and suppliers (not yet gone) as well as staff, including management (not yet gone) will remain for some time.

On March 14, McDonald’s officially suspended operations in Russia. Since then, many other large foreign companies have done so amidst special operations, sanctions, logistical problems and settlement difficulties. However, some restaurants with Ronald McDonald at the entrance continued to operate for several more days, gradually halting production processes. There are now 45 fully operational facilities (in Moscow, St. Petersburg, Kazan, Yekaterinburg and Novosibirsk): all of them are franchised, ie run by local businessmen:

What about other fast food restaurants?

The other two members three large fast foodIn addition to McDonald’s, it also announced their departure from Russia after February 24.

Colonel Sanders’ Spiritual Child Suspends Russian Division March 9 – Brand Owner KFC (Kentucky Fried Chicken) American company Yum! Brands closed 70 restaurants in Russia. These are just some of the 1,000 spicy wing stores in Russia – the rest are run by independent owners under licensing or franchising agreements. One of the big franchisees even negotiated the sale of the business: the Polish company AmRest was trying to sell all 267 of its KFC restaurants to VTB Capital. But nothing came of it: the deal failed because of sanctions imposed by the European Union against the bank.

Burger King, famous for its bold PR, and in this situation decided to stand out from the competition. Or rather, the Russian division, which behaved like pirates independently of its big brother. The fact is that Burger King will be happy to close in Russia, as the owners of the company said. Only now do Russian business owners (Burger King Russia, a joint venture between private Burger Rus and state-owned VTB Capital) continue to operate restaurants because, under the agreement, they have the right to do so. Without thinking twice, the American owner of the Burger King brand began the process of selling his stake in the Russian company, ending corporate support for the company, including operations, marketing and supply chains.

Burger King, KFC and McDonald’s accounted for 70% of the Russian fast food market and 25% of the restaurant market in 2021.

What will change in the restaurants

Fintolka Dmitry Levitsky, an expert, restaurateur and co-owner of the HURMA group of companies, did not believe until the end that McDonald’s stores would continue to operate in Russia under the new name. According to him, it would make more sense if McDonald’s waited as long as possible for the situation to improve. After all, sanctions can be lifted and American owners will simply lose money.

The expert speculated about the signs that “McDonald’s” could continue to work. For example, it was possible to make a dual brand – “Mac and something” the “something from McDonald’s”, And then remove the soulmate, Dmitry Levitsky analyzes the options. He remembered the example of Rostik’s-KFC. The old ones remember that in the early 2000s there was one such Russian Rostik Group, which took over the main franchise of the KFC chain, after which it was renamed Rostik’s-KFC, and later on the market simply the original name of the American KFC remained and Rostik’s fell.

Main question: But what will be in the new brand and what terms will the American company agree with its licensees? Will the technologies in Russian restaurants really remain McDuck’s, and therefore familiar and beloved to its fans? Ingredients, suppliers, recipes, menus, quality standards, that’s it. Chances are, the US company has been systematically replacing imports for many years and working with local suppliers, say Fintalk interlocutors.

Owners of new and old restaurants have minimal dining options. Fast food customers are unlikely to notice a change in the menu, given what equipment is in the restaurants and what dishes it is designed for.

“Basically, you should not expect anything new there – as they exchange hamburgers, they will continue to trade,” said Denis Evstigneev, a restaurant franchise consultant.

According to Maria Vysotskaya, co-owner of consulting firm ReStart and a franchising expert, every company that has been forced to stop working in Russia is trying to maintain contracts with partners, including McDonald’s. Another question is whether the network can not provide all the necessary work and raw materials to its partners.

“For the consumer, it is not the brand and the interior that are important, but the preservation of the authenticity of the dish. I recently heard in a cafe: “Delicious french fries, but I want from Poppy”, gives an example Maria Vysotskaya.

Brand, not huhry-muhry

Technology, of course, is a useful thing, but in the case of fast food chains, the brand is important – it has been built for decades, it is known in most countries, for which franchisees release payments to American companies and malls clean it area. McDonald’s, KFC and Burger King are not just potatoes and meat on a bun with the right sauce.

“This is also very nice marketing, this is a whole world that offers the consumer its own story and new emotions,” explains restaurant franchise consultant Denis Evstigneev.

Thus, even if Russian fast food sellers continue to work according to the old standards, without a high-profile brand, their position is in danger of being shaken. Restaurant market experts believe that the revenue and traffic of the former McDonald’s stores will decrease if they continue to work under a different name, because the restaurants attracted people mainly because of their name. Shopping center owners will not be too happy with the castle either. After all, a world-renowned tenant not only provided food for shopaholics, but also attracted traffic.

Another scenario event development – fast food chains abandon and terminate franchise contracts, and begin to pirate and work against all odds under the old American brand names. Then the sign will remain and, as it were, the brand will be in place. But the filling will also suffer. Licensees will be left without access to unique vendor recipes and ingredients, which means dishes known to customers will begin to disappear. A franchise is a complex thing and it is not just about a high profile brand, but also about a product and a technology. This means that it would be pointless to work under the McDonald’s brand without all the recipes and unique ingredients, explains Denis Evstigneev.

“If the iron canopy completely covers us, then it will be possible to use any trademarks. The only question is the quality of the dishes: can we repeat them? – summarizes the co-owner of the consulting agency ReStart Maria Vysotskaya.

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