There are no Tim Hortons restaurants in Russia, but that hasn’t stopped scores of Canadians from sending the restaurant chain angry messages on social media about doing business in the country.
Their actual target is the chain’s owner, Restaurant Brands International (RBI), which also owns Burger King — a fast-food chain that’s still open for business in Russia.
Toronto-based RBI says its 800 Burger Kings in the country remain open because they’re stand-alone franchise operations that are independently owned.
But the explanation still doesn’t sit well with Canadians who want businesses to suspend all operations in Russia, to protest its invasion of Ukraine.
“Everything has to be done to try and put an end to this,” said Dan Goldstein of Montreal, who has Ukranian-Jewish roots and is a descendant of Holocaust survivors.
He posted multiple complaints about Burger King’s presence in Russia on the Tim Hortons Facebook page because of his concern for the people of Ukraine.
“We’re dealing with a despotic regime … that really has no interest in terms of what’s right or wrong,” said Goldstein about the Russian invasion.
“Anybody who has any ability to make an impact has a moral imperative to do what they can.”
To thank McDonald’s for suspending all business in Russia, Dan Goldstein of Montreal dined at the restaurant this week and posted about it on Facebook. (Dan Goldstein/Facebook)
Many companies pull out
On Tuesday, following pressure on social media, several multinational companies, including McDonald’s, Starbucks and Coca-Cola, announced they would suspend all business operations in Russia.
RBI said while its Burger King franchise locations remain open, it will suspend all corporate support for the Russian market and redirect corporate profits from the franchise operations to help support Ukrainian refugees.
“We are watching the attack on Ukraine and its people with horror and are focusing our efforts in the region on contributing to the safety of Ukrainians seeking shelter and security,” said an RBI spokesperson in an email.
Restaurant chains KFC and Subway announced similar plans for their Russian operations. They will redirect profits and support humanitarian efforts in Ukraine, but KFC’s approximately 900 franchise locations will stay open as will Subway’s approximately 450 franchise locations.
However, other restaurant chains have suspended all operations in Russia, including their independently-owned locations.
Although franchisee-owned KFCs in Russia remain open, its parent company, Yum! Brands, announced on Tuesday it’s finalizing an agreement to temporarily close the company’s 50 Pizza Huts in the country, most of which are also franchisee-owned.
Last week, Starbucks denounced Russia’s attack of Ukraine, but kept open its 130 stores in the country owned by a licensed partner. Then on Tuesday, the coffee chain giant announced its partner had agreed to temporarily close up shop.
McDonald’s confirmed to CBC News on Thursday that it is closing its more than 800 restaurants in Russia, including the small portion that are franchisee-owned.
Chains still in Russia respond
CBC News asked Yum! Brands, Subway and RBI why they’re unable to temporarily close all franchise operations in Russia.
Yum! Brands did not respond.
Subway said it doesn’t directly control independent franchisees and their restaurants.
RBI spokesperson Leslie Walsh said in an email that Burger King has “long-standing legal agreements” with its franchisees in Russia “that are not easily changeable in the foreseeable future.”
McDonald’s, Pepsi, Coca-Cola, Starbucks join companies boycotting Russia
McDonald’s, Starbucks, Coca-Cola, PepsiCo and Yum! Brands (KFC and Pizza Hut) are the latest multinational companies to announce they’re pausing business operations in Russia to protest the country’s invasion of Ukraine. 3:35
Toronto-based franchise lawyer Ned Levitt, with the firm Dickinson Wright, said franchisors don’t have the power to arbitrarily shut down their franchisees, even if head office has a compelling argument.
“If it’s not specified in the agreement, that power isn’t given to the franchisor. That’s just the reality,” said Levitt.
He said the franchisor would have to negotiate an agreement with the franchisee to close up shop, and that might be a challenge for some companies doing business in Russia.
“The franchisees, I guess they’re Russian, right? Maybe their sympathies are completely with Russia, and they don’t want to make this statement, this embargo and close down,” he said.
Levitt said some companies may have been able to broker a deal with their franchisees by offering financial incentives to help soften the blow.
McDonald’s said on Tuesday it will continue to pay salaries of its 62,000 employees in Russia now out of work due to the company’s exit from the country.
‘Not a good look’
Regardless of the reason behind it, businesses staying open in Russia causes an optics problem.
“To have their brands associated with a dictatorial regime that is creating all sorts of death and destruction in Ukraine, that’s not a good look,” said Rob Person, a professor of International Relations at the Military Academy in West Point, N.Y., speaking in a personal capacity.
He said, along with economic sanctions, the aim of the businesses pulling out is to convince the Russian people they need to take a stand against Russian President Vladimir Putin.
“If there are hundreds of thousands of Russians that go out into the streets protesting against him as things get worse and worse, I think that’s about the only thing that could influence Putin on this,” said Person.
Levitt suggests any Russian franchisees resistant to closing may eventually change their mind as public sentiment against Russia grows and/or the country’s economy crumbles, making it more difficult to run a profitable business.
“As public attitudes change, maybe the franchisor can convince them [to close] because it’s a good business decision, never mind being a political or moral decision.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
