McDonald's Shareholder pressure behind the decision to suspend business in Russia?

Following Russia's invasion of Ukraine, companies in each country are being forced to respond to Russian businesses.

However, withdrawing from a business is not straightforward, and there are cases where you cannot withdraw even if you want to withdraw.

McDonald's, a major hamburger chain, announced on the 8th of this month that it will temporarily close all 850 stores in Russia.

McDonald's gained enthusiastic popularity when it entered Moscow in 1990 at the end of the Soviet era, and the day after the temporary closure was announced, many people packed into Moscow stores.

Shareholder's letter urges consideration of business suspension

A letter was delivered to McDonald's before the announcement.

It was sent by a shareholder of McDonald, who is in charge of the New York State Pension Fund, the largest public pension fund in the United States with total assets of 279.7 billion dollars and over 34 trillion yen in Japanese yen.

It said, "I believe that companies that continue to do business in Russia will face reputational damage and human rights risks," and urged them to consider suspending their business in Russia.

McDonald's continues to pay salaries to about 62,000 employees in Russia even after the store is temporarily closed, and it is reported that the cost is 50 million dollars a month, which is more than 6 billion yen.

Shareholder pressure is believed to have worked behind the decision to temporarily close the company despite the heavy burden.

Some companies continue to operate for franchise agreement reasons

The movement away from Russia is spreading mainly in Western companies, but there are companies in the restaurant chain that continue to operate at stores in Russia.

The fact that the local owner who manages the store under the franchise agreement did not accept the consultation for suspension of business highlights the fact that it cannot be decided only by the intention of the company.

Of these, Burger King, a major fast food chain, has 800 stores in Russia.

After the military invasion by Russia, the company's SNS has voiced "I will not eat forever", "Shame on me. Is money more important than human life?", But the company continues to operate in Russia. I am.

All stores in Russia are run by independent owners with franchise agreements, and the company has asked for a suspension of operations, but explained that it was not accepted.

For this reason, the company announced that it would not make new investments in Russia instead of closing the store, and would provide financial assistance to Ukraine, and asked for its understanding.

In addition, Kentucky Fried Chicken and Subway continue to operate stores because they have franchise agreements.

Attorney Ned Levitt, who is familiar with this issue, said, "As long as we have a contract, the local owner has the right to operate the store, and it is difficult for the company to close the store. It was a lesson that we should assume not only the scenario but also the possibility of a war in the contract. "

Yale University School of Management, U.S.A. Opening companies such as withdrawal from Russia

The Yale School of Management in the United States publishes a daily collection of companies that have announced their withdrawal from business in Russia on the Internet.

As of the 29th, there are more than 450 companies and organizations that have taken some action.

In addition to "withdrawal", the list is categorized into "suspension of business" and "reduction of scale", and also lists the names of companies that continue to do business.

Professor Sonenfeld, who publishes the list about this, said, "I knew that the list moves people. It has a great effect on attracting public attention and attention," and the publication of the list influenced the judgment of the company. Revealed the recognition that it is.

On top of that, Professor Sonenfeld said about the current situation in the United States, "Companies that stay in Russia run the risk of getting strong opposition from consumers all over the world. From the consumer's point of view, it is a permanent stain rather than a temporary one. As long as you have the same company name, you will lose value. "

Some people write "withdrawal from Russia" on corporate SNS

Dan Goldstein, who has a Ukrainian father and a Polish mother and lives in Canada, is asking companies to withdraw from Russia through social media.

On the 10th of this month, the Facebook of Burger King, a major fast food chain operating in Russia, said, "The company doesn't care that innocent people are being killed in Ukraine for no good reason. It seems that you are thinking. "

"I want to know if the company has done everything the company can do to shut down the store. The company has a moral responsibility," Goldstein said.