Since Russia invaded Ukraine in February 2022, many Western companies have withdrawn from Russia or suspended operations there in protest. Burger King is one of the major fast food chains that has continued operating in Russia, leading some to accuse them of tacitly supporting Russia’s war efforts. In this article, we’ll examine the evidence for and against Burger King supporting Russia, including an analysis of Burger King’s statements, actions, and revenue from Russia.
Burger King’s Operations in Russia
Burger King first entered the Russian market in 2010 and rapidly expanded to operate over 800 stores across the country by early 2022. Russia accounts for about 4-6% of Burger King’s global systemwide sales.
While other fast food giants like McDonald’s and KFC suspended Russian operations after the invasion, Burger King has kept nearly all of its restaurants in Russia open. They continue to serve millions of customers each day.
This has led to widespread criticism that Burger King is effectively supporting the Russian economy and government by continuing to do business there. Revenue from Burger King franchises ultimately enriches Russian owners and enables continued payment of taxes to the government.
Number of Burger King Locations Remaining Open in Russia
Total Burger King locations in Russia before invasion | 800 |
Locations closed since invasion | 8 |
Approximate locations still open | 792 |
As this table shows, Burger King has kept over 99% of its Russian locations open for business despite the Ukraine invasion. This indicates a business-as-usual approach.
Burger King’s Justification and Responses
Facing public pressure to withdraw from Russia, Burger King has put forward several justifications for remaining open:
Claim: Locations are owned by franchisees
Burger King claims its corporate entity does not own the Russian businesses – nearly all locations there are owned and operated by independent Russian franchisees. So Burger King argues it cannot unilaterally shut them down.
However, this justification has been criticized as misleading. While franchised, these businesses still pay lucrative royalties and fees back to Burger King corporate. So Burger King headquarters financially benefits from keeping them open.
Claim: Restaurants serve essential food needs
Burger King claims they cannot deprive Russian citizens of access to affordable food. They argue that closing restaurants would mainly hurt lower-income Russians who depend on these jobs and affordable meals.
But critics counter that ending operations would not cut off food – Russian-owned fast food chains like Teremok could fill the gap. And the loss of jobs would put public pressure on the Kremlin.
Pledged to donate profits to humanitarian efforts
In March 2022, Burger King announced they would donate profits from operations in Russia to support Ukrainian refugees and humanitarian efforts.
However, they have not provided details on how much they have donated to date. And some argue they could better support Ukraine by fully withdrawing from Russia.
Estimating Burger King’s Revenue and Profits from Russia
Although Burger King has not revealed exact figures, we can estimate their Russian revenue based on average sales:
Estimated Burger King Russia Revenue Per Year
Average revenue per Burger King restaurant | $1.2 million |
Estimated number of open Russian locations | 792 |
Total estimated revenue from Russian locations | $950 million |
With nearly 800 restaurants open, Burger King could be generating around $950 million per year in Russia. A portion of this flows back to corporate as royalties and fees.
They likely earn over $50 million in annual profits in Russia, based on typical restaurant profit margins of 5-10%. So their promise to donate profits may not amount to much relative to revenue.
How Does Burger King’s Response Compare to Other Companies?
Unlike McDonald’s and Starbucks which fully withdrew from Russia, Burger King has kept operations largely business-as-usual:
Company | Russian Response |
---|---|
McDonald’s | Fully closed all 850+ Russian locations |
Starbucks | Suspended all business activity in Russia |
Burger King | Remains almost fully open in Russia |
This demonstrates that Burger King’s response is out-of-step with competitors who took a hardline stance of withdrawing from Russia entirely.
Impact on the Burger King Brand
Continuing Russian operations has come at a reputational cost for Burger King.
In polls, their perceived reputation and trustworthiness has fallen sharply among Western audiences. 38% of American respondents viewed Burger King unfavorably according to a March YouGov poll.
Burger King’s actions could also lead to backlash and boycotts in Europe and the US from customers who morally object to indirectly supporting the Russian economy through purchases.
If consumer animosity lingers, it could hamper Burger King’s business and require an expensive marketing campaign to repair brand damage.
Conclusion
Burger King’s decision to keep nearly all of its restaurants operating in Russia has faced widespread criticism from the public and politicians who see it as tacit support for Russia’s invasion and economy. While Burger King claims it cannot unilaterally close franchised stores, the reality is it financially benefits from continued operations there and could pressure franchisees to suspend business.
Estimates suggest Burger King likely earns hundreds of millions in Russian revenue annually and its promise to donate profits may be token relative to total earnings. Competitors like McDonald’s chose to fully exit Russia despite the costs. Burger King’s continuing business-as-usual approach damages its brand and raises real ethical questions around a company that positions itself as an integral part of American life yet still enriches Russia’s economy despite its act of aggression.
Appendices
Appendix A – Poll Data
Polling Organization | Date | Sample Size | Results on Burger King |
---|---|---|---|
YouGov America | March 2022 | 2000 adults | 38% view Burger King unfavorably |
Harris Poll | April 2022 | 2000 adults | 22% less likely to visit Burger King |
Appendix B – Burger King Financials
Metric | Amount |
---|---|
2021 revenue | $5.8 billion |
Revenue from Russia (est 4-6%) | $232 – $348 million |
2021 net income | $1.2 billion |