Western brands, as a result of Russia’s attack on Ukraine, have stopped their operations in the country, but others can’t leave because of complex franchise agreements. Marriott and Accor are unable to leave the country because they have outsourced their Russian businesses to third parties. Marks and Spencer, and Burger King have outsourced their Russian businesses to third parties. There are currently 800 Burger King restaurants in Russia, 48 M&S stores, and 28 and 57 hotels operated by M&S and Accor, respectively. BBC reports that the brands are bound by franchise documents, making it difficult for them to close their stores.
FiBA, a Turkish company with permission from the Turkish government to sell Marks and Spencer products in Eastern Europe, operates Marks and Spencer stores in Russia. Similarly, Burger King relies solely on franchises for its operations in Russia. While the company has stated that they will not be sending products to FiBA due to the crisis, closing outlets already present in Russia will not be easy.
Reuters reports that Burger King’s owner, Restaurant Brands International, said that the long-standing legal agreements cannot easily be changed in the near future. Currently, Accor and Marriot are also operating under similar deals in Russia. In its report, the BBC said Marriott’s Russian hotels were owned by third parties, but the company said it would ‘continue to evaluate’ whether these hotels could stay open, possibly indicating it would re-evaluate its franchise agreements.
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