Ethical decisions in the retreat from Russia

In an interview with Andrea Tolu for Foodservice Consultant, the magazine for the Foodservice Consultants Society International, Leo Martin comments on the ethical decisions facing foodservice companies with a presence in Russia.  

Since the invasion of Ukraine, many in the foodservice sector joined the international boycott, announcing a scale back from operations or an exit from the country entirely. But as Leo and Andrea discuss, while the ethical dilemma is quite straightforward, should we stay or should we go, there are a number of factors that make the this ethical decision quite complex. Some companies in Russia for example, have found themselves tied up in a master franchise contract that leaves them with very little control. These factors, according to Leo Martin, managing director and co-founder of GoodCorporation, fall into one of three buckets: legal, practical and moral.

From a legal aspect, foodservice companies in Russia are mostly at risk of sanction laws, possibly as a result of a franchisee being on a sanctions list. If a company is directly at risk of breaking such laws, this overrides any counterargument and presents a clear case to leave.

Practicality is also important and a number of factors need to be taken into account. An inability to leave Russia due to binding agreements may present a problem from a brand reputation perspective. However, most franchise agreements give the franchisor control over their brand name, goodwill, trademarks and quality control. This provides the legal basis for forbidding franchisees to use a brand name. Ongoing monitoring of the supply chain will also be needed. Some disruption is already happening, making it harder to make payments or move money around.

Finally, the moral justification to leave or remain is also important. Ideally there should be a clear moral logic to stay or go, but again, there are different factors that may tip the scale in one direction or another. Those companies involved in the production of oil and gas have a clear reason to leave. However, a company that is feeding young children and providing medical nutrition, has a stronger moral argument to remain.

In addition to these key factors is the power of stakeholder pressure. In the article, Leo explores some of the pressure that stakeholders can exert and the impact this can and has had on the recent decision making by businesses operating in Russia.

Click here to read the article in full.

Photograph by Michael Parulava