NEW YORK, June 3 Reuters For at least a decade, Burger King39;s formula for European expansion has relied on a joint venture partnership, including a master franchisee, to open and operate new locations.
But now the fastfood chain has a whopper of a problem in Russia. It hasn39;t been able to exit its partnership or close its roughly 800 franchised locations following Russia39;s February invasion of Ukraine.
Burger King halted corporate support for its Russia locations in March. Parent company Restaurant Brands International Inc RBI, which was formed in 2014 when Burger King merged with Tim Hortons, said on March 17 that it was trying to sell its stake in the joint venture.
However, current sanctions by western countries against Russia sharply limit the pool of possible buyers, one person familiar with the matter said.
Reuters could not determine the status of any negotiations.
Part of the problem, lawyers said this week, is the complexity of its jointventurestyle master franchise agreement, which allows Burger King to profit from sales of Whopper burgers without the risk of using its own capital.
Unlike rival McDonald39;s Corp, which owns the vast majority of its Russia locations, and which plans to sell them to an existing franchisee, Burger King39;s Torontobased parent doesn39;t own any of its own restaurants in Russia.
There39;s just a really complex contractual and legal atmosphere right now that39;s giving franchisees and franchisors in Russia no good…