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Domino’s Pizza will shutter all of its 142 Russian locations.

Domino’s Pizza has made the decision to cease operations in Russia, making it one of the initial prominent Western fast-food businesses to withdraw from the nation subsequent to the departures of McDonald’s and Starbucks over a year ago.

On Monday, DP Eurasia, the corporate entity responsible for holding franchise rights for the renowned Domino’s Pizza brand in Russia, Turkey, Azerbaijan, and Georgia, announced its intention to initiate bankruptcy proceedings for its Russian subsidiary, DPRussia.

The decision underscores the growing challenges encountered by Western corporations that opted to maintain their presence in Russia subsequent to the commencement of the conflict in Ukraine. The Kremlin has implemented measures that have significantly increased the challenges and financial burdens faced by Western companies seeking to divest their Russian commercial holdings. In certain instances, the Chinese government has taken ownership of local assets belonging to companies, such as Danish brewer Carlsberg (CABGY) and French yogurt company Danone (DANOY).

“The immediate holding company of DP Russia has been forced to take this action due to the deteriorating business climate, which will result in the end of the group’s presence in Russia and the termination of any ongoing efforts to sell the firm as a going concern,” DP Eurasia stated in a press release.

According to the statement, it is premature to ascertain the financial consequences of a prospective insolvency.

The company currently has a network of 142 locations across the borders of Russia, thereby establishing itself as the third-largest pizza delivery enterprise in the nation. DP Eurasia announced in December that it was conducting a review of its operations in Russia and actively pursuing a potential sale.

There is a possibility that the pizza establishments in Russia will persist in their operations, but under different ownership and branding. The Russian branches of McDonald’s (MCD) and Starbucks (SBUX) saw a change in ownership, with local entities assuming control and subsequently rebranding the establishments following the departure of their respective parent corporations from the Russian market.

Starbucks has undergone a rebranding process and is now known as Stars Coffee, while McDonald’s has adopted a new name, “Vkusno i tochka,” which can be translated as “Tasty, period.”

According to a statement issued by Domino’s Pizza Inc (DPZ), a publicly traded company based in New York, it ceased its provision of assistance to the Russian market via its subsidiaries in the beginning of 2022.

Based on the findings of scholars at Yale University, it has been observed that over 1,000 international corporations have either withdrawn or temporarily halted their activities in Russia subsequent to the commencement of a comprehensive military intervention by the Kremlin in Ukraine.

A total of 378 multinational corporations from various regions of the world persist in conducting business activities within the Russian market. However, approximately half of these entities have chosen to temporarily halt fresh investments and reduce their operational scope in the country.

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