Alexander Govor, to purchase and operate all McDonald’s restaurants in Russia

Following its announcement that it will exit the Russian market and has initiated a process to sell its Russian business, McDonald’s Corporation announced today that it has entered into a sale and purchase agreement with its existing licensee Alexander Govor.
No information on the purchase price has been unveiled by the US multinational.

McDonald’s had disclosedon last 16th May that as a result of its exit from Russia expects to record a charge, which is primarily non-cash, of approximately $1.2-1.4Bn to write off its net investment in the market and recognize significant foreign currency translation losses previously recorded in shareholders’ equity.

Under this agreement, Mr. Govor will acquire McDonald’s entire restaurant portfolio and operate the restaurants under a new brand. Since 2015, Mr. Govor has served as a McDonald’s licensee and has operated 25 restaurants in Siberia.

The agreement remains still subject to certain conditions, including regulatory approval, The definitive closing of the contract is expected to take place in the coming weeks.

The pact includes the following obligations for Govor related to McDonald’s employees. They must be retained for at least two years, on equivalent terms. The buyer has also agreed to fund the salaries of corporate employees who work in 45 regions of the country until closing, as well as fund existing liabilities to suppliers, landlords and utilities.

No more McDonald’s branded restaurants but no Uncle Vania instead

As part of its complete exit from Russia, McDonald’s had announced last 16th May that the company intends to initiate the process of “de-Arching” the restaurants, which entails no longer using the McDonald’s name, logo, branding, and menu, though the Company will continue to retain its trademarks in Russia.

On the informations spread by the media about trademark applications, that replicate already registered trademarks in the Russian Federation: Dyadya Vanya (дядя Ваня in Russian) similar to McDonald’s, IDEA (ИДЕЯ in Russian) similar to IKEA, and others, Rospatent explains that “filing of a trademark application with Rospatent, its intake and assignment of the application number does not provide the automatic registration and legal protection of the filed mark”.

Rospatent also underscores: “Legal protection in the Russian Federation may only be granted following the two-step examination procedure, namely formal and substantive, where it is determined whether the filed application meets the requirements specified in the Russian Civil Code and its implementing regulations.
Rospatent makes its decision on the State registration of a trademark application or refusal of such registration upon the examination results.

In case an identical or similar trademark has already been registered in the Russian Federation, it would be the ground for refusal in such registration”…”At the same time, applicants often withdraw such applications for controversial marks: for instance, Dyadya Vanya (Uncle Vania) application was withdrawn by the applicant two weeks after the filing.”

The appication for the Dyadya Vanya brand had been filed by the company Russian-Field Logistic.

Image over the headline.- McDonald’s in Saint Petersburg. Photo by Southgeist through wikimedia Commons. To watch the original image and read theterms of the lisense, click here

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