Can Russian pancakes replace McDonald's?

Can Russian businesses replace McDonald's and recreate the success of the US-based international corporation?

Mikhail Goncharov, the founder of Russia's Teremok fast food chain (it sells traditional Russian food such as blini (pancakes)), believes that the American fast food chain was originally designed as a business that would sell products at extremely low prices. The point is about the approach itself, the businessman wrote on social media.

Goncharov stressed that all the talking about an opportunity for Teremok restaurants to replace McDonald's does not make sense, because the Russian chain was definitely not a competitor to McDonald's.

"It's just because we don't know how to do it the way that they do it either technologically or in terms of management and marketing,” Mikhail Goncharov explained.

Russia has not been able to invent its own iPhone either, he continued. It is only ignorant people who can talk about a possibility to build and develop domestic businesses that could successfully develop foreign ones in two or three months or two or three years. Those who say that one should put an end to embezzlement in the first place are even more ignorant, he added.

One of the reasons, for which Teremok is unable to catch up with McDonald's, is insufficient state support. According to Goncharov, McDonald's had much bigger preferences in Russia. In order to start moving in this direction, Goncharov believes that one should:

• abolish VAT (value added tax) for companies with a turnover of more than two billion rubles;
• reduce the UST tax (uniform social tax) for them to 15-20 percent;
• extend loans to companies;
• allocate investment for development.

"After all, you don't seriously think that you can raise a loan at 25 percent per annum, invest billions of rubles in development, pay 20 percent VAT and 30 percent UST and keep profit?” he wondered.

McDonald's announced a temporary suspension of operations on the Russian market due to the crisis in Ukraine. The time when McDonald's can resume working in Russia remain unclear. The company has not terminated rent contracts, nor has it dismissed any employees.

It was assumed that all McDonald's restaurants would close in Russia on March 14, but some of them continued working until the moment when production processes stopped. Some of the restaurants operate on a franchise basis and are not connected with the head office.