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Aug, 24 2015

McDonald\'s expands operations in Russia, to compete with Subway

The agreement will also help the burger chain compete with Subway which already has over 78 franchises in the region and is dominating McDonald\'s in the number of global restaurants.

McDonald's has announced a license agreement to open restaurants in Siberia, extending the status of US corporate dominance, between Russia and the US.

The fast food company released a statement confirming that the deal would see Russian company GID LLC open around 20 fast-food restaurants in the Novosibirsk, Tomsk, Kemerovo, and Altai regions in the nearest future.

Earlier only one franchise agreement has been made in Russia with a restaurant in St. Petersburg's Pulkovo airport.

McDonald's has more than 500 restaurants in 125 cities in Russia however franchise agreement could pave the way for more Russian business to take up the opportunity.

The agreement will also help the burger chain compete with Subway which already has over 78 franchises in the region and is dominating McDonald's in the number of global restaurants.

Khamzat Khasbulatov, President of McDonald’s Russia said that the “agreement with GiD will help enhance the McDonald’s brand in Russia, build the business over the long term and further strengthen the relationship with our customers”.

McDonald’s, last summer faced regulatory pressure when Russian authorities carried out unannounced inspections and enforced temporary closures at 200 McDonald’s restaurants for what it claimed were sanitary violations.

The checks coincided with an increase in tensions with the US over Ukraine and so McDonald's hopes that the franchise deal will help the company to expand in the region while preventing further trouble given that they will be Russian owned franchises.

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