Papa John's Is Being Criticized For This Decision By Its Russia Franchisee
Several large companies have shut down their business in Russia due to the country's invasion of and attacks on Ukraine. In the fast food sector, McDonald's made the decision on March 8 to close its roughly 850 locations in Russia, which will cost the company $50 million per month, according to CFO Kevin Ozan (via Insider). Following the lead of "the biggest decision-maker" in fast food, Starbucks, Yum Brands (the parent company of KFC and Pizza Hut), and Burger King quickly made similar moves in response to the conflict.
McDonald's will take a financial hit while it pays its Russian employees' salaries and other costs, per The New York Times, but its shutdown in the country was relatively feasible since the company owns 84% of its Russian stores. Companies with restaurants operated by franchisees, however, will have a harder time closing these locations. Papa John's announced a suspension of its corporate operations in Russia last week — but controversy struck when Christopher Wynne, the owner of a company that operates 190 Papa John's franchises in Russia, refused to shut down the stores.
190 Papa John's stores are still operating in Russia
Although Papa John's as a company took a stand against Russia, franchise owners (and the parent companies that control those franchises) have the right to continue operations because they are financially responsible for the business. According to the The New York Times, Christopher Wynne, who is originally from Colorado, facilitated the franchising of the majority of Russia's Papa John's locations through his company, PJ Western, starting in 2007. The stores' machinery and ingredients come mostly from local suppliers.
It's clear that Wynne has a large financial stake in the success of these franchises, but he explains that he is keeping these businesses open for the good of the Russian owners. "My interest is first and foremost my employees and franchisees and keeping the lines of cultural exchange with the Russian people open," Wynne told The New York Times. His decision to keep the stores open has resulted in quite the uproar on social media. "I really did not need another reason to avoid Papa John's toxic corporate image. Call them 'Papa Putin's' or 'Putin's John,'" one user tweeted. "I guess Papa John's is keeping their locations open in Russia because nobody will eat that crap in the States," another person posted.