McDonald's Extends Reach in Russia
August 21 2015 - 1:05PM
Dow Jones News
By Olga Razumovskaya
MOSCOW-- McDonald's Corp. said Friday it had signed a license
agreement with a Russian franchisee to open restaurants in remote
Siberia, broadening the reach of one of the major symbols of
American corporate power even as relations between Russia and the
West are strained.
Under the franchising deal, Russian company GiD LLC will open up
to 20 fast-food restaurants in the Novosibirsk, Tomsk, Kemerovo,
and Altai regions "in the nearest future," the company said in a
statement.
McDonald's Russia currently has more than 500 restaurants in 125
cities, employing more than 40,000 people. So far in Russia
McDonald's has been developing its own restaurants with only one
franchise agreement for a restaurant in St. Petersburg's Pulkovo
airport.
Russia's economy is in recession due to Western sanctions over
Ukraine and a plunge in the price for oil, Russia's main export.
Consumer spending has been sinking this year after the ruble
plunged against the dollar, fueling double-digit inflation.
McDonald's faced regulatory pressure last summer when Russian
authorities carried out snap inspections and enforced temporary
closures at some McDonald's restaurants, claiming sanitary
violations. The checks coincided with a sharpening of tensions with
the U.S. over Ukraine, where Russia has annexed Crimea and provided
support for pro-Russian separatists.
Write to Olga Razumovskaya at olga.razumovskaya@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 21, 2015 12:50 ET (16:50 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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