Russia no longer runs on Dunkin’.
The Canton-based coffee and doughnut company is halting “all current development and investment in Russia,” amidst that country’s invasion of Ukraine, a Dunkin’ spokesperson said in a Thursday afternoon e-mail.
The company’s “approximately 20″ locations in Russia will not necessarily close, as they are owned and operated by “a local, independent franchise owner,” the spokesman said. But the company, which is owned by Atlanta-based Inspire Brands, will withdraw corporate support and halt any future growth.
The coffee conglomerate’s decision comes two days after competitors Starbucks and McDonalds announced that they would be suspending operations in Russia, joining the over 330 other companies that have pulled their business out of the country.
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But because Dunkin’ stores are owned by independent franchisees, the company doesn’t have legal control to shut down its shops in Russia, the spokesperson added. Some other large American restaurant chains, such as Burger King, KFC, and Pizza Hut, have similar arrangements.
Dunkin’ was facing mounting pressure to shut its stores after earning a spot on Yale professor Jeffrey Sonnenfeld’s list of companies still operating in Russia during its invasion of Ukraine. Dunkin’ was listed as having 150 locations in Russia in the Yale database, but the Dunkin’ spokesperson confirmed the company only has about 20 stores in the country and said they have reached out to the researchers to issue a correction.
It’s not the first time the doughnut giant has pulled out of Russia. In 1999, Dunkin’ closed its stores “following three years of losses exacerbated by a rogue franchisee who sold liquor and meat pies” along with the company’s usual breakfast treats, according to the Wall Street Journal. Dunkin’ returned to Russia in 2010.
Annie Probert can be reached at annie.probert@globe.com.
As someone deeply immersed in the world of multinational corporations and their global operations, it's evident that decisions made by major companies often have far-reaching consequences. Now, delving into the recent developments concerning Dunkin' and its withdrawal from the Russian market amid the Ukraine crisis, it's crucial to analyze the various facets involved.
Firstly, Dunkin', a Canton-based coffee and doughnut company owned by Atlanta-based Inspire Brands, has taken the strategic decision to halt all current development and investment in Russia. This move aligns with the broader trend where numerous companies, including Starbucks and McDonald's, have suspended their operations in Russia in response to the invasion of Ukraine.
One notable aspect is that Dunkin's approximately 20 locations in Russia will not necessarily close immediately. These outlets are owned and operated by local, independent franchise owners. However, Dunkin', as the corporate entity, is withdrawing its support and putting a stop to any future growth in the country. This approach mirrors the actions taken by other major American restaurant chains like Burger King, KFC, and Pizza Hut, which also operate in Russia through similar franchise arrangements.
A unique challenge for Dunkin' is that, due to the franchise model, the company lacks legal control to directly shut down its stores in Russia. This is an interesting nuance, differentiating Dunkin' from companies with direct ownership of their international outlets. It's worth noting that this franchise model has been a characteristic feature of Dunkin's operations, leading to complexities in responding to geopolitical events.
The decision by Dunkin' to pull out of Russia has been influenced by external pressures, including its inclusion in Yale professor Jeffrey Sonnenfeld's list of companies still operating in Russia during the conflict. Dunkin' clarified that it has around 20 stores in Russia, contrary to the 150 locations mentioned in the Yale database, and is actively seeking a correction.
Interestingly, this isn't the first time Dunkin' has exited the Russian market. In 1999, the company closed its stores due to financial losses attributed to a rogue franchisee selling unauthorized items. Dunkin' returned to Russia in 2010, highlighting the complexities and challenges that global companies face in navigating international markets.
In conclusion, Dunkin's recent decision to cease development and investment in Russia sheds light on the intricate dynamics of multinational corporations, franchise models, and the impact of geopolitical events on business strategies. The company's move aligns with a broader trend of major corporations reassessing their presence in Russia amidst the ongoing crisis.
