A leading restaurant company is set to reopen its restaurants in war-torn Ukraine. Here’s a look at what it could mean.
What Happened: McDonald’s Corp MCD will reopen restaurants in Ukraine in the coming months according to a report from the Associated Press.
All McDonald’s restaurants in Ukraine and Russia were closed months ago when the war started.
“We’ve spoken extensively to our employees who have expressed a strong desire to return to work and see our restaurants in Ukraine reopen,” McDonald’s Corporate Senior Vice President of International Operated Markets Paul Pomroy said. “In recent months, the belief that this would support a small but important sense of normalcy has grown stronger.”
The company has 109 restaurants in Ukraine, and the report indicated locations in the capital city Kyiv and Western Ukraine would be among the first to reopen.
Why It’s Important: Ukraine has been hit hard economically after it was invaded by Russia earlier this year. A report from the International Monetary Fund said it expects Ukraine’s economy to shrink by 35% this year.
Several U.S. brands including Nike Inc NKE and Yum! Brands, Inc. YUM-owned KFC has reopened locations in Kyiv.
McDonald’s has continued to pay more than 10,000 employees in Ukraine since closing the restaurants.
The news of the reopening of restaurants could help McDonald’s financially and also help the company generate some positive buzz as a company that could help boost Ukraine’s economy and provide some sense of normalcy.
In Russia, McDonald’s made the decision to sell off its 850 locations to a franchise owner after decades of business in the country. It was previously reported that closed locations in Russia were costing McDonald’s $55 million per month. Russia was the first major market McDonald’s has ever exited.
McDonald’s sold the Russian operations to Russian businessman Alexander Govor, who owned and operated 25 McDonald’s locations in Serbia.
McDonald’s holds the rights to repurchase the Russian locations within 15 years under the terms of the deals, which could indicate it sees the war ending and public opinion about Russia being different over a decade from now.
Benzinga previously reported that Russia could allow local business owners the chance to steal American-owned businesses in the country.
MCD Price Action: McDonald’s shares are up 1.06% to $264.81 on Monday at publication.
Photo: Yevhen Roshchyn via Shutterstock
Image and article originally from www.benzinga.com. Read the original article here.