It’s been three weeks since the Russian government invaded Ukraine without any reason. More than 400 multinational companies have left the country.
But there are still a lot of people, including a lot of American businesses, making money in the country. Why, in the face of so much public outrage over Russia’s actions, aren’t they leaving? Well, there are a few.
It’s a good idea to take Burger King with you. The fast-food chain wants to leave Russia, but because of the way its business is run there, it can’t. The company says you can’t leave right now.
Burger King, like some other American chains, like Subway and Marriott, has entered the Russian market through the franchise model, which means it has teamed up with local operators who run stores under the Burger King name.
This means that Burger King’s parent company, Restaurant Brands International, only owns 15% of the company that runs Burger Kings in Russia.
So even though Burger King said it wants to close down its 800+ stores, it needs the help of its Russian franchisee to do so. They said no when asked. The company is taking other steps, such as stopping new investments, selling off that 15% stake, and stopping support for its supply chain, to reduce its operations in Russia.
- Only the things you need.
Nestle, P&G, PepsiCo, and other big consumer goods companies have stopped investing money or marketing in Russia, but they’re still there to sell things like dairy products, baby food, and personal care products. In a letter, Pepsi CEO Ramon Laguarta said that “we must stay true to the humanitarian side of our business.”
Officials in Ukraine aren’t happy with that. After a phone call with Nestle CEO Mark Schneider, Ukrainian Prime Minister Denys Shmyhal tweeted that Schneider “doesn’t get it.” Paying taxes to a country that is a terrorist means killing innocent children and their mothers. He said he hopes Nestle will think again.
- I’m better than the Russian government is at running the country.
Companies like Koch Industries say they’ll keep their two factories in Russia open because they don’t want to give them to the Russian government “so that it can run and benefit from them.” Perhaps he was referring to a comment made by Vladimir Putin, the president of Russia. Putin said that he thought about nationalising Western assets in Russia and putting them under “external management.”