The end of McPlomacy has come as McDonald’s leaves Russia permanently
· May 17, 2022 ·

According to a company press release on Monday, McDonalds is leaving the Russian market altogether.

The corporation had previously suspended its operations in the nation over the Ukrainian invasion, but is now making that suspension permanent.

McDonald's is looking to sell its 850 restaurants in the Russian market and hopes to include jobs for their 62,000 Russian employees as part of any deal. The company expects to write off $1.2-1.4 billion for the loss of its net investment and recognize significant foreign currency translation losses, which I imagine is because the Biden administration's sanctions will keep them from actually accessing any monies from a sale.

McDonald's CEO Chris Kempczinski said in a letter to employees:

Some might argue that providing access to food and continuing to employ tens of thousands of ordinary citizens, is surely the right thing to do, But it is impossible to ignore the humanitarian crisis caused by the war in Ukraine.

McDonald's has never "de-arched" and exited a major market before, and the fact that it's Russia is significant.

McDonald's opened its first store in Moscow on January 31, 1990, and the event was heralded as not just a victory for capitalism, but also a victory for peace. Only two short months earlier, the Berlin Wall had fallen, and only two years later, the Soviet Union collapsed. The Bolshoi Mak's (Big Mac) entry into the country had rang the death knell of communism and became a symbol of the end of the cold war and a victory for capitalism.

Bernd Kaussler, a political science professor at James University in Harrisonburg, Virginia said the phenomenon actually created political theory.

McDonald's entry into the Soviet Union was so groundbreaking it gave rise to a political theory. The Golden Arches Theory holds that two countries that both have McDonald's in them won't go to war.

While the theory has never been tested, it has held true for over 30 years.

Vlad Vexler, a political author, who waited two hours in line at the first Moscow McDonald's when he was nine and now lives in London, said that the reality of global isolation is just beginning for Russians.

Many Russians fed by government propaganda believe Western companies won't really leave, or will reopen as soon as there's a ceasefire. It will take some time, he says, for the realization of Russia's isolation to sink in.

At the moment, there is a lot of denial. And a feeling of helplessness.

McDonald's is in the process of removing signage and won't allow the potential buyer to serve its menu. They intend to keep their trademarks in Russia and will take steps to enforce them if necessary.

However, there may be other options for a potential buyer, as this McDowell's pop up coming to Virginia suggests.

I wonder if a Bolshoi Mick will be making its way to Russia soon?

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