BURGER KING RESTAURANT CHAIN LOSES ITS LESSORS

The amount of claims received by the Burger King restaurant chain from its landlords have recently exceeded the amount of claims for the past three years. The experts have information about 27 applications to the court for 56 million rubles.

The fast food chain has not been on good terms with its contractors before, annually increasing their claims. In 2017, the plaintiffs demanded almost 8.6 million from the chain, and in 2018 - 13 million. The claim of the last year was more than 22.5 million rubles.

It is known that in Russia the company has been operated on a franchise basis and is represented by Burger Rus LLC. The main beneficiaries of the company, according to the data from the open sources, are VTB Group and businessman Alexander Kolobov.

The chain’s share in the Russian market of fast food restaurants is 5.8%.

Thus, Burger King is in third place after McDonald’s and KFC with their shares of 9.3% and 5.9%, respectively. However, while the claims for McDonald’s amounted to 6.9 million rubles (11 claims since the beginning of 2020), the analysts found only 2 claims for 800 rubles to the Yam Brands Company.

The market experts note that for a chain with a billion-dollar revenue (43.6 billion rubles over the past year) and a relatively small amount of losses (287 million rubles over the same period), such a record number of the claims testifies to the firm position that the company holds in the disputes with lessors.

While other companies accept the conditions of the contracts offered by the real estate employees, Burger King demonstrates a “position of strength” by delaying utility and rental payments.

Whether such a position will bring the success to the company in the new economic conditions, caused by the pandemic is not clear. However, the sources report that the chain of restaurants have already lost some profitable commercial areas in Moscow. The lessor literally kicked out the Burger King from the previously occupied premises on Myasnitskaya Street and on Georgian Val, next to the Belorussky Train Station. The main reason is a non-payment of leases.   

The specialists, engaged in the premises rental area, are recording an increase in a demand for rental of the space, currently occupied by the Burger King. This applies to premises on Kozhevnicheskaya and Novoslobodskaya streets. If this goes on, the Burger King chain might be left without lessors in the future. At any rate, the loss of the ability to work in profitable locations with high traffic is very likely.