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The Street
The Street
Business
Tony Owusu

Russia Wants to Sell Big Macs With or Without McDonald's Blessing

The invasion of Ukraine by Russian ground and air forces has turned Europe upside down. 

Economic sanctions have depressed the ruble to historic lows, causing record inflation in the country of 144 million. Meanwhile a lack of Russian oil flow to the West has energy prices in Europe jumping. 

At home, calls for companies to stop doing business have reached fever pitch levels. 

The first batch of corporations willing to soak in the good publicity of instituting their own sanctions, leaving Russian citizens without their services was large. 

Companies like Microsoft (MSFT) and Apple (AAPL) were two of the first to halt all product sales in Russia. Apple also limited Apple Pay and other services in the country starting March 1. 

Visa (V) and Mastercard (MA) blocked their services to Russian banks. 

On March 1, the investment management firm BlackRock BLK also halted the creation of new shares of its iShares MSCI Russia ETF.

After the first wave of companies left, there were still some companies doing business in the country. Over the coming days those companies that stayed were dragged online by people wanting them to join the boycott. 

McDonald's was one of those companies. But now that Mickey D's has come around and halted operations in the country also, Russia could fight back in an unorthodox way. 

McDonald's

Russia Wants to Sell Big Macs Anyway

Desperate times call for desperate measures and Russia could decide to pull out all the stops to get McDonald's up and running. 

The Ministry of Economic Development of Russia has discussed the temporary removal of restrictions on the use of intellectual property, which would allow franchisees in the country to operate their restaurants  

"This will smooth out the impact on the market of breaks in supply chains, as well as the shortage of goods and services that arose due to new sanctions by Western countries," the Ministry of Economic Development said

The ministry said that the measure could affect inventions and computer programs from corporations with patents and could include companies that manufacture their products in the 

The Russian government office said that the decision on goods and groups of goods will be made by the Russian Federation government. 

Under this provision, Russia could decide to rescind McDonald's patents and independently operate their restaurants regardless of their wishes. 

McDonald's Business in Russia

McDonald's could lose up to $50 million a month after deciding to shutter its nearly 850 restaurants in Russia and Ukraine, according to Reuters.

McDonald's gained 9% of its revenue last year from Ukraine and Russia, according to a company filing.

Unlike its franchisee-focused approach in the U.S., about 84% of its 847 locations in Russia are company-owned. All of the 108 McDonald's restaurants in Ukraine are owned by the company.

Combined, those restaurants accounted for $2.1 billion in revenue for the company last year. 

In the past, Russia has punished U.S. companies when the West places sanctions on the country.

In 2014, shortly after Moscow annexed Ukraine's Crimea region in 2014, Russia President Vladimir Putin closed four McDonald's restaurants in the country's capital over what he said were sanitary violations.

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