A number of big British names are still operating in Russia despite the closure of other global store and restaurant businesses and the closure of factories since the invasion of Ukraine.
Companies such as McDonald’s Coca Cola, Pepsi, Apple, Unilever, KFC and Pizza Hut have all ceased business operations in Russia as well as imports and exports. But branches of M&S and Burger King remain open, as do hotels operated by Accor and Marriott – and the companies behind them say there’s not much they can do at this stage.
The brands say they are unable to close operations in Russia because they do not own them directly – instead they operate under complex franchise and licensing arrangements, reports Wales Online. According to the BBC, the companies have about 1,000 outlets operating under their name in Russia.
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There are 48 M&S stores operated by a Turkish company which has purchased the right to use the name and sell M&S products. M&S says it stopped supplying the company in response to the war.
There are still 800 Burger King franchise restaurants in Russia. The company told the BBC this was due to “long-standing legal agreements [which] are not readily changeable in the foreseeable future.”
Marriott told the BBC that its hotels in Russia are operated by a third party and that it is studying what it can do.
Graeme Payne, UK and international franchising specialist at law firm Bird&Bird, told the BBC: “As a member of the public you would wonder why they don’t just close their stores? But from a purely commercial and contractual view, it is very difficult to do so without far-reaching legal consequences.”
The BBC says Accor has suspended all future hotel openings and bookings to those sanctioned. Burger King is redirecting profits from its operations in Russia to humanitarian efforts.
Marriott and IHG Hotels & Resorts halted developments and investments in Russian hotels and closed their headquarters. The BBC says M&S has pledged more than £1.5m to support refugees and is donating 20,000 coats and thermals.
M&S has more than 40 franchise stores in Russia, the majority of them based in Moscow.
In a statement, the London-listed retail company added: “We are doing all we can to support the people of Ukraine, and in response to the growing refugee crisis, we are building on our existing support for the Unicef UK appeal for Ukraine with a £1.5 million loan to support the UN Refugee Agency (UNHCR) and Unicef to help children and families in need.
“This consists of a £500,000 seed donation to UNHCR with an additional £500,000 for matching fundraising for all of our global colleagues and double donations on Sparks transactions to support Unicef, and the activation of in-store and online donations in the UK.
“We are also providing practical help through UNHCR, donating 20,000 units of coats and thermal clothing to families in need, for a total of an additional £500,000.”