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Chronicle Live
Chronicle Live
National
Neil Shaw & Nicole Goodwin

Why M&S, Burger King and other businesses are still open on Russia's high streets

A number of major UK names are still operating in Russia despite other global companies closing shops and restaurants and shutting down factories since the invasion of Ukraine.

Companies such as McDonald's Coca Cola, Pepsi, Apple, Unilever, KFC and Pizza Hut have all stopped trading in Russia as well as stopping imports and exports. But branches of M&S and Burger King remain open as do hotels operated by Accor and Marriott - and the companies behind them say there is little they can do at this stage.

The brands say they are unable to close the operations in Russia as they do not directly own them - instead they are operating under complex franchise and licensing arrangements, Wales Online reports. According to the BBC, the companies have around 1,000 outlets operating under their names in Russia.

Read more: ITV to show Concert for Ukraine

There are 48 M&S shops being operated by a Turkish company which bought the right to use the name and sell M&S products. M&S says it has stopped supplying the company as a response to the war.

There are 800 franchised Burger King restaurants still operating across Russia. The company told the BBC this is because of "long-standing legal agreements [which] are not easily changeable in the foreseeable future."

Marriott told the BBC its hotels in Russia are operated by a third-party, and it is exploring what it can do.

Graeme Payne, a specialist in UK and international franchising at law firm Bird&Bird, told the BBC: "You would as a member of the public… think why don't they just close their stores? But just from a pure business and contractual perspective, it's very difficult to do so without some far reaching legal consequences."

The BBC says Accor has suspended all future hotel openings and bookings to people who have been sanctioned. Burger King is redirecting profits from operations in Russia to humanitarian efforts.

Marriott and IHG Hotels & Resorts have halted Russian hotel developments and investments and have closed their corporate offices. The BBC says M&S has pledged more than £1.5m to support refugees and is donating 20,000 coats and thermals.

M&S has more than 40 franchise-run stores in Russia, with the majority of these based in Moscow.

In a statement, the London-listed retail company added: "We are doing everything we can to support the people of Ukraine, and in response to the growing refugee crisis we are building on our existing support for Unicef UK's Ukraine appeal with a £1.5 million package to support the UN refugee agency (UNHCR) and Unicef to help children and families in need.

"This is made up of a kickstart £500,000 donation to UNHCR with a further £500,000 for matched fundraising for all our global colleagues and double donations on Sparks transactions to support Unicef, and activation of till-point and online giving in the UK.

"We are also providing practical help through UNHCR, donating 20,000 units of coats and thermals for families in need, totalling a further £500,000."

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