Why Domino's Is Closing All of Its Stores in Russia

Russians will have to call another number for fast, inexpensive pizza delivery as Domino’s closes all of its stores in the country.

DP Eurasia, which owns Domino’s franchise rights in Russia, Turkey, Azerbaijan and Georgia, announced on Monday that it’s filing for bankruptcy on behalf of its Russian franchisee, DPRussia, CNN has reported.

“With the increasingly challenging environment, DPRussia’s immediate holding company is now compelled to take this step, which will bring about the termination of the attempted sale process of DPRussia as a going concern and, inevitably, the group’s presence in Russia,” DP Eurasia said in a statement.

As CNN reported, the Russian government has made it “vastly more difficult and more costly” for companies from the West to sell their Russian businesses. According to Reuters, “Some have managed to negotiate swift exits, often selling at huge discounts or handing the keys to local management.”

In March 2022, the Domino’s Russian franchisee announced that it was suspending royalty payments from its stores in the country and limiting further investment in Russia, Reuters previously reported. But all of those stores—numbering 188 at the time—remained open. DPRussia now operates 142 Domino’s stores in Russia, making it the country’s third largest pizza delivery business.

Russia’s war in Ukraine has prompted a mass withdrawal of American restaurant chains since early 2022. Yum Brands, the parent company of Pizza Hut, announced last July that it was pulling out of Russia and selling its stores to another company that would operate the restaurants under a different brand name. In March 2022, Papa Johns said it was suspending operations in Russia, but Christopher Wynne, the head of Russia-based PJ Western, said all of his company’s stores—which are owned by franchisees—would remain open for the sake of the franchisees and workers and to keep “the lines of cultural exchange with the Russian people open.”

On the non-pizza side, McDonald’s, Starbucks and Krispy Kreme also pulled out of Russia last year, turning their stores over to local businesses.