What’s in a name? Russia rebrands McDonald’s restaurant chain

US fast-food giant McDonald’s announced in May that it would leave Russia following Moscow’s invasion of Ukraine.

The United States fast-food giant McDonald’s announced on May 16 that it would exit the Russian market in the wake of Moscow’s invasion of Ukraine.

On Sunday, McDonald’s restaurants reopened their doors in Moscow once again under new Russian ownership and a new name, “Vkusno-i tochka”, which translates as “Tasty and that’s it”.

Here’s what we know:

The new logo:

The famous Golden Arches have been taken down and replaced with a new logo, resembling the letter “M” and comprised of symbols that represent two fries and a hamburger against a green background.

Chief Executive Oleg Paroev, McDonald’s former Russian head, said the new company had settled on the new name – a closely guarded secret – only the day before the launch on Sunday.

There was some speculation on social media about how best to translate the new name into English. “Tasty and that’s it” was broadly adopted, although another suggestion was: “Tasty. Full stop or period”.

Branches:

“Vkusno-i tochka” reopened on Sunday in Pushkin Square in what was McDonald’s first restaurant in Soviet Moscow in 1990, when it sold as many as 30,000 burgers, but the queue outside the restaurant was much smaller than it was three decades ago.

The chain will keep its old McDonald’s interior but will remove any trace of its former name.

Initially, 15 rebranded restaurants will open in and around the Russian capital and another 200 restaurants by the end of June and all 850 by the end of summer, executives said.

The new owner said up to 7 billion roubles ($121m) will be invested this year in the business, which employs more than 50,000 people.

Menu:

McDonald’s flagship Big Mac and other burgers and desserts such as McFlurry are missing, but other popular items are on a smaller menu selling at slightly lower prices.

A double cheeseburger was going for 129 roubles ($2.24) compared with roughly 160 roubles under McDonald’s and a fish burger for 169 roubles, compared with about 190 previously.

Paroev said the chain would keep prices “affordable”. They would likely rise due to inflation, but not higher than the prices of competitors, he said.

Most ingredients come from within Russia, but some items were not immediately available due to logistical difficulties and because some suppliers have left Russia. For instance, the company needs to find a new soft drinks supplier after Coca-Cola suspended business in Russia over the war in Ukraine.

Ownership:

Siberian businessman Alexander Govor has taken over the franchise operation through his firm GiD LLC. He has been a McDonald’s licensee since 2015 and had helped the chain expand into remote Siberia, where he operated 25 restaurants.

McDonald’s will have an option to buy its restaurants in Russia back within 15 years, Russian authorities have said.

Govor told reporters on Sunday that the price he paid was “far lower than market price” and had been a “symbolic” figure. The US chain booked a $1.4bn charge for the deal. McDonald’s did not respond to a request for comment on the price.

Russia and Ukraine accounted for about 9 percent, or $2bn, of McDonald’s revenue last year.

Management/staff:

Until the takeover, Paroev had worked for McDonald’s for seven years, including as chief financial officer of the Russian business for 6 1/2 years until November 2021, according to his LinkedIn profile.

He was appointed Russia McDonald’s CEO in February, weeks before Moscow sent tens of thousands of troops into Ukraine on February 24.

Govor will retain the chain’s tens of thousands of employees for at least two years, the US company said.