Chains like Burger King and Subway have said franchisee agreements make it legally impossible to fully exit operations in Russia. But one Yale professor argues they can just offer to buy out Russian franchisees.
For U.S. restaurant brands, breaking up with Russia is just a matter of will and cash, according to Yale School of Management's Jeffrey Sonnenfeld, who argues that companies should seek to buy out master franchisees that decline to suspend operations.Big U.S. chains often sell long-term, master franchise rights in foreign countries. The franchisee pays for the privilege, including a percentage of profit, in exchange for the brand and a variety of support services .
Some of these agreements also include supply chain help, from napkins to food ingredients, although many foreign franchisees source all of their own materials. Dunkin, for example, says its still-open Russian franchisees are self-sufficient. PJ Western, a Papa John's franchisee in Russia that's actually based in Denver and backed by PE firms CapMan and Baring Vostok, even built its own dough-making facilities.was able to largely exit Russia because most of its stores there were company owned, but chains like Burger King, Yum Brands and Subway each have said that franchisee agreements make it legally impossible for them to completely exit .
Sonnenfeld, who has the ear of many top American CEOs, views that as a cop-out, believing the brands should offer their Russian franchisees a price they can't refuse. He adds that some franchisees might welcome the chance to exit, since patronizing Western brands soon could be deemed unpatriotic by Russian officials.that it's unfair to deny ordinary Russian workers a job or ordinary Russian customers a meal.
Dunkin' declined to say if it offered cash to close its stores, although a source says its situation is particularly complicated because the master franchisee is in Russian bankruptcy court. Subway and Burger King's parent company didn't return requests for comment.
Ireland Latest News, Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Senator Warren's Bill Will Hurt Crypto, Not Russia (Opinion)Hiding behind a nationalistic cause doesn’t make sanctioning validators any less reckless or any more effective.
Read more »
Mariupol Says Ukrainians Are Being Forced Into RussiaThe Mariupol City Council has issued a statement claiming that its residents are being evacuated to Russia against their will and one Ukrainian lawmaker says those people are being taken for forced labor in remote parts of Russia.
Read more »
Ukraine Says Russia Bombed Mariupol Art School Sheltering 400Ukrainian authorities said Sunday that Russia's military bombed an art school sheltering some 400 people in the embattled port city of Mariupol, where Ukraine's president said an unrelenting Russian siege would be remembered for centuries to come.
Read more »
For the U.S., a Tenuous Balance in Confronting RussiaWASHINGTON — In the first weeks of the first major European land war of the 21st century, the United States has sent tank-killing weapons to Ukrainian forces, but not fighter jets. It is equipping embattled Ukrainian troops with lightweight “kamikaze” attack drones, but not, at least in an obvious way, conducting an aggressive cyberwar to degrade Russia’s technological advantage. The White House will commit no U.S. or NATO planes to the skies above Ukraine, a move U.S. officials fear could risk
Read more »
Zelensky Says Third World War Looms If Negotiations with Russia FailZelensky says the third World War looms if negotiations with Russia fail.
Read more »
Manufacturers With Ties to Russia Struggle to Unwind“I’m working to sever my supply chain from Russia as fast as I can.” U.S. manufacturers with Russian ties are working to figure out how to survive.
Read more »