What will happen to McDonald’s in Russia

In early March, McDonald’s temporarily closed all Russian restaurants, but continued to pay salaries to 60,000 employees.

In mid-May, the company announced that it was selling the Russian company to Alexander Govor, one of its franchisees. The agreement has already been approved by the FAS.

The journalistic background of the agreement gives the impression that these restaurants are a matter of national importance. For example, Finance Minister Anton Siluanov talked about possible changes to the menu after the renaming, Andrey Vorobyov, head of the Moscow Region, spoke about the company’s raw materials base, and the Ministry of Industry and Trade directly participated in the negotiations for the agreement.

What is known to the buyer

On May 19, the American McDonald’s Corporation announced that it would leave the Russian market and sell the business in the country to one of its franchisees – 61 years old businessman from Novokuznetsk Alexander Govor.

He started his business with coal mining and then engaged in petrochemistry. His family now owns the development company Inrusinvest, which manages the Park Inn by Radisson hotel and a network of private clinics. “Grand Medica”

Since 2015, Govor’s GiD has been developing McDonald’s restaurants as a franchise. Now it has 25 points, the company’s revenue in 2021 amounted to 2 billion rubles, a net loss of 12.4 million rubles.

McDonald’s Russian business will not go to the Guide, but to the company “Club Hotel” which also belongs to Govor.

The amount of the transaction was not disclosed by the parties, but, according to some estimates, McDonald’s Russian company could be valued at 35 billion rubles, which is half the value before February 24.

How McDonald’s operated in Russia

At the beginning of 2022, McDonald’s had 850 restaurants in 62 areas. The company has only three licensees, owns 132 stores. In addition to the 25 points of Govor, these are restaurants at train stations and airports in Moscow and Petersburg – belong to the company Razvitie Rost, which belongs to the restaurant company Rosinter. The third licensee is the Regional Catering Network, LLC SPP, owned by Kazakh billionaire Kairat Boranbaev. The businessman also owns the McDonald’s franchise in Kazakhstan and Belarus. Now, some franchise restaurants in Moscow and the suburbs continue to operate.

In 2020, the network received 114 billion rubles in revenue in Russia. Businesses in Russia and Ukraine together generated about $ 2 billion, which is 9% of the global network’s total revenue, or about 2% of global sales in physical terms. The company estimated its losses from shutdowns in Russia and Ukraine at $ 127 million.

What you need to know about the deal

For at least two years, the new owner must keep the employees’ jobs on the same terms. This is one of the terms of sale offered McDonald’s Corp. The buyer also agreed to finance the salaries of corporate employees working in 45 regions of the country before concluding the deal and to pay off current liabilities to suppliers, owners and utilities.

McDonald’s may return to Russia. Within 15 years, the company can acquire its activities on market terms.

What will happen to the menu and prices is unclear. According to the governor of the Moscow region Andrey Vorobyov, the fast food chain will retain 95% of the menu items, but “local replacement of some ingredients” is possible.

How McDonald’s clones work

Several network copy attempts are known.

“Makovsky” network in Grozny. The owners copied the design of the restaurants and the packaging of McDonald’s. Judging by the restaurant’s page on social media, they sell burgers, pizza, donut donuts and Spring rolls with different fillings. Guests in the reviews write that “burger, Hotdog and other pleasures of unhealthy food are dry and not very tasty “, but mainly Yet praise. According to the cartographic service 2GIS, there are two places with this name in Grozny.

“Autocafe” in the Crimea. This is the largest imitator, the chain has eight facilities. Since 2014 it has been developed by the first top executives The Ukrainian “McDonald’s” Alexander Meshkov and Sheryan Seitmemetov. Entrepreneurs have worked in American fast food for many years, so they managed to recreate many of the former employer’s dishes. Their menu includes autohamburger, autocheeseburger, autoroyal and autofried potatoes. However, Meshkov said they had no right to do so Same the same thing McDonald’s does: “We have a different recipe, there’s a technology map for it. In a hamburger, for example, the sauce is different. ” The restaurant’s website states that mayonnaise is used in burgers.

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