Domino’s Pizza will shut down all 142 of its stores in Russia after failing to find a buyer for the flailing business.
Instead, the company will file for bankruptcy.
DP Eurasia operates the Domino’s Pizza brand in Russia, as well as in Turkey, Russia, Azerbaijan and Georgia.
Its subsidiary DP Russia is the one slated to go bankrupt, with the others continuing operations as per usual.
The fast food giant faced significant woes in the Russian market, having been on the lookout for a buyer since December last year.
In a London Stock Exchange announcement overnight (Monday local time), DP Eurasia said the company would no longer look in vain for a buyer.
“With the increasingly challenging environment, DP Russia’s immediate holding company is now compelled to take this step, which will bring about the termination of the attempted sale process of DP Russia as a going concern and, inevitably, the group’s presence in Russia,” it said.
The company received little western interest for the brand off the back of sanctions imposed on Russia for starting a war with Ukraine.
It had previously told shareholders it was “evaluating its presence” in Russia as it continued to limp along.
Domino’s Pizza Inc, the American multinational business and master franchisor, had no affiliation with the Russian business.
A spokesman told the BBC that the US head office had stopped providing “any support for the Russian market in early 2022”.
Other fast food giants including McDonald’s, Coca-Cola and Starbucks exited the Russian market by choice after the nation began an illegal invasion of Ukraine in February last year.
Russians took over all the above businesses and rebranded, making it likely the Domino’s chain will also be absorbed in a similar way.
Starbucks was renamed Stars Coffee and McDonald’s is now called “Vkusno I tochka,” a rough translation of “Tasty, period.”
Domino’s Pizza is reportedly Russia’s third largest pizza delivery business.
According to Yale University, at least 1000 foreign companies have exited Russia or paused business operations to distance themselves from the troubled nation.
One firm that has copped criticism in recent months is Unilever, the parent company of brands such as Ben & Jerry’s ice cream and Dove soap.
Although the company has insisted it is not a “straightforward” matter to just up and leave, it has also been claimed the business is generating huge amounts of money from this decision, reportedly contributing $1.151 billion to the Russian economy in the past year.
The exit of Domino’s Pizza from Russia comes just months after the brand shut down 70 stores in a bid to turnaround dipping profits.
In June, in an update to the Australian market, the fast food chain revealed that its earnings were stuck in a rut and it was making some drastic changes to improve its situation.
The pizza franchise said it would be scrapping between 65 and 70 of its “underperforming” corporate stores in a major ‘turnaround’.
Another 70 to 75 stores are set to be sold to experienced franchisees and restructured.
Overall, the changes represent a reduction or change to 15 to 20 per cent of its 913 stores.
Domino’s Pizza also announced plans to shut down all 27 of its stores in Denmark, dubbing the European nation a “loss making market”.
The closure and selling of underperforming stores to franchisees is expected to save Domino’s between $16 million to $20 million per year.
In the statement, the pizza giant said these underperformers were taking longer to turn a profit “than originally anticipated”.
Global CEO Don Meij said “Making the decision to close any store is a difficult one, but for these stores it is the right one.”