Wendy's leaving Russia over management issues, not politics

A Wendy's single with cheese large combo meal

A Wendy's single with cheese large combo meal at a Wendy's restaurant in Mt. Lebanon, Pa. on May 6, 2013. Photo Credit: AP

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Wendy's Co., the third-biggest U.S. fast-food hamburger chain, is leaving the Russian market after three years, pointing to change the local franchisee's management.

The country's eight Wendy's outlets are being shut down, Wendy's spokesman Bob Bertini said by email. The company is based in Dublin, Ohio.

Wenrus Restaurant Group, a former unit of Moscow-based Food Service Capital, agreed in 2010 to open 180 restaurants under the Wendy's format across Russia within a decade. However, there was a change in Wenrus's ownership and management in the past year, Bertini said.

"Unfortunately, the new leadership of Wenrus has not expressed interest in growing Wendy's business in Russia, nor shown they have the resources to successfully operate the existing restaurants on a long-term basis," Bertini said. "As a result, we have decided not to continue business in Russia at this time."

Muscovites have been getting a taste of American fast food since 1990, when McDonald's Corp. opened its first restaurant there. While McDonald's has about 430 restaurants across Russia and Burger King Worldwide Inc., Subway Restaurants and Yum Brands Inc. have entered the market, as of last year the country had only one restaurant per 930 people, compared with one per 150 in the U.S., according to Business Analytica research company.

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LIGHTS OUT

Bertini said Wenrus has closed four Wendy's outlets, and the chain expects the remaining four to close in coming weeks.

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Wenrus didn't reply to an email seeking comment and the company's website was down. Food Service Capital sold its share of the business, said a spokeswoman for Food Service's RPCOM unit. She declined to name the buyer or the reason behind the sale.

With Russia's economy on the brink of recession, according to HSBC Holdings, not all chains have been thriving. Chili's Grill & Bar last year closed its flagship Moscow restaurant less than three years after it opened.

McDonald's in April closed up its restaurants in Crimea, citing supply problems, a move seen as a snub in Russia for its annexation of the peninsula territory in Ukraine, which prompted U.S. sanctions. The deputy speaker of the Russian parliament, Vladimir Zhirinovsky, called for protests to drive the Big Mac maker out of the country, a campaign backed by 62 percent of Russians, according to a poll by SuperJob's Research Center.

Bertini said Wendy's hopes to return to the country.

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