Bloomberg – by Jason CorcoranWendy’s Co., the third-biggest U.S. fast-food hamburger chain, is leaving the Russian market after three years, after a change in the local franchisee’s management.
The country’s eight Wendy’s outlets are being shut down, Bob Bertini, a spokesman for Dublin, Ohio-based Wendy’s said by e-mail. Wenrus Restaurant Group, a former unit of Moscow-based Food Service Capital, agreed in 2010 to open 180 restaurants under the format across Russia within a decade. There was a change in Wenrus’s ownership and management in the past year, and the decision to leave the country had nothing to do with politics, Bertini said.
“Unfortunately, the new leadership of Wenrus has not expressed interest in growing Wendy’s business in Russia, nor shown they have the resources to successfully operate the existing restaurants on a long-term basis,” Bertini said. “As a result, we have decided not to continue business in Russia at this time.”
Muscovites have been getting a taste of American fast food since 1990, when McDonald’s Corp. (MCD) opened its first restaurant there. While McDonald’s has about 430 restaurants across Russia and Burger King Worldwide Inc. (BKW), Subway Restaurants and Yum! Brands Inc. (YUM) have entered the market, as of last year the country had only one restaurant per 930 people, compared with one per 150 in the U.S., according to Business Analytica research company.
Lights Out
Bertini said Wenrus has shut four Wendy’s outlets, and the chain expects the remaining four to close in coming weeks.
Wenrus didn’t reply to an e-mail seeking comment and the company’s website was down. Food Service Capital sold its share of the business, said a spokeswoman for Food Service’s RPCOM unit. She declined to name the buyer or the reason behind the sale.
With Russia’s economy on the brink of recession, according toHSBC Holdings Plc (HSBA), not all chains have been thriving. Chili’s Grill & Bar last year closed its flagship Moscow restaurant less than three years after it opened.
McDonald’s in April shuttered its restaurants in Crimea, citing supply problems, a move seen as a snub in Russia for its annexation of the Ukrainian peninsula, which prompted U.S. sanctions. The deputy speaker of the Russian parliament, Vladimir Zhirinovsky, called for protests to drive the Big Mac maker out of the country, a campaign backed by 62 percent of Russians, according to a poll by SuperJob’s Research Center.
Bertini said Wendy’s hopes to return to the country.
To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net
To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Thomas Mulier, Celeste Perri
http://www.bloomberg.com/news/2014-07-28/wendy-s-pulls-out-of-russia-after-franchisee-change.html