McDonald's Extends Reach in Russia

By Olga Razumovskaya 

MOSCOW-- McDonald's Corp. said Friday it had signed a license agreement with a Russian franchisee to open restaurants in remote Siberia, broadening the reach of one of the major symbols of American corporate power even as relations between Russia and the West are strained.

Under the franchising deal, Russian company GiD LLC will open up to 20 fast-food restaurants in the Novosibirsk, Tomsk, Kemerovo, and Altai regions "in the nearest future," the company said in a statement.

McDonald's Russia currently has more than 500 restaurants in 125 cities, employing more than 40,000 people. So far in Russia McDonald's has been developing its own restaurants with only one franchise agreement for a restaurant in St. Petersburg's Pulkovo airport.

Russia's economy is in recession due to Western sanctions over Ukraine and a plunge in the price for oil, Russia's main export. Consumer spending has been sinking this year after the ruble plunged against the dollar, fueling double-digit inflation.

McDonald's faced regulatory pressure last summer when Russian authorities carried out snap inspections and enforced temporary closures at some McDonald's restaurants, claiming sanitary violations. The checks coincided with a sharpening of tensions with the U.S. over Ukraine, where Russia has annexed Crimea and provided support for pro-Russian separatists.

Write to Olga Razumovskaya at [e-mail]

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(END) Dow Jones Newswires

August 21, 2015 12:50 ET (16:50 GMT)

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