“Branded” is a new weekly column devoted to the intersection of marketing, business, design, and culture.
In a memorable scene from the 1988 Eddie Murphy vehicle Coming to America, the owner of a suspiciously familiar-looking fast-food spot called McDowell’s explains that despite a “little misunderstanding” with the world’s best-known burger chain, his place is totally different. McDonald’s sells a Big Mac, for instance, whereas McDowell’s serves a Big Mick (on a bun with no sesame seeds). Pointing to his logo—a bright yellow, curvy “M”—he deadpans: “They’ve got the Golden Arches. Mine are the Golden Arcs.”
This brief comedic riff on both the inescapable familiarity of McDonald’s branding and the vagaries of intellectual property law comes to mind because of the news this week that the Golden Arches will be leaving Russia permanently, and the chain is selling its locations to a current licensee in the market, Alexander Gover (who currently operates 25 locations in Siberia). According to CNBC, Gover will operate the company’s Russian locations “under a new brand.”
When the company announced it would be selling its Russian operations—and write-off up to $1.4 billion–it underscored that it “intends to initiate the process of ‘de-Arching’ those restaurants.” This means the new owner can’t use “McDonald’s name, logo, branding, and menu,” and that the company intends to hold onto its trademarks in Russia.
While the phrase “de-Arching” may sound slightly absurd, the idea of fully unbranding McDonald’s in Russia actually sounds like a fascinating challenge. To be sure, its other assets—locations, employees, a supply chain, etc.— are real. But we’re talking about one of the most storied, potent, and familiar brands in the history of capitalism. What exactly is a de-Arched McDonald’s? And how much might the answer end up being, well, some version of McDowell’s?
In response to Russia’s invasion of Ukraine, McDonald’s announced it was putting its 847 locations in Russia on a sort of pause back in March, even as it continued to pay its 62,000 employees there. (The company owns and operates 84% of those locations; the rest are run by franchisees.) And the symbolic significance of even that interim move was undeniable, and influenced other Western firms. The decision now to unwind entirely raises questions for other Western mega-brands that have paused operations, like Coca-Cola and Yum (whose portfolio includes Pizza Hut and KFC).
That said, the McDonald’s brand holds a particularly significant place in Russia: It’s been widely noted that the opening of the first Moscow McDonald’s back in 1990, just months after the fall of the Berlin Wall, was an enormously symbolic event, precisely because it is one of a handful of brands that stands not only for itself but for global capitalism in general. (Famously, that opening was mobbed, and the chain continued to do strong business in the formerly communist nation for the next 32 years.)
No doubt this has contributed to the Russian government’s sensitivity about big Western brands pulling up stakes. In March, The Wall Street Journal reported that Russian prosecutors were threatening to “seize assets of companies that withdraw from the country,” McDonald’s included. The threat included seizing trademarks. Official Russian sources denied making such threats, but the government has indicated that it might simply ignore the intellectual property claims of businesses from “unfriendly” countries, and politicians bandied about the possibility of simply nationalizing some exiting Western businesses.
The agreement with Gover presumably rules out such extreme scenarios. But it will be interesting to follow what Gover’s un-Arched branding strategy might be. Certainly there were hints, during the company’s pause before deciding to pull out entirely, that being as McDonald’s-ish as possible might come into play.
After all, the brand still seems popular with Russian consumers despite the company’s decision to abandon the market. According to Reuters, at least some of the franchised locations have actually remained open and have “seen a pick up in business since McDonald’s closed its [directly owned] outlets.” (In a downer echo of the chain’s arrival in Russia, the news that it was exiting for good sparked lines outside at least one of the remaining locations, as customers ordered up “what may be their last Big Mac.”)
Not long after McDonald’s suspended operations, The Washington Post reported that a domestic fast food outfit, Uncle Vanya, filed for a trademark on “a yellow and red logo [that] looks almost identical to the iconic Golden Arches of McDonald’s, but tilted 90 degrees to the right.” This was later withdrawn, but other decidedly familiar filings (including one for “McDuck”) have followed.
The whole episode highlights how much meaning and value a brand can express. On the most basic, everyday level, McDonald’s customers don’t just want “a burger,” they want a McDonald’s burger. Part of that involves basic quality assurances, but there’s also something more abstract: the idea of McDonald’s.
Some have argued that the company’s decision puts a last nail in the coffin of the famous (gimmicky) theory that no two countries with McDonald’s outlets would go to war against each other. But in a way, it’s actually evidence in the theory’s favor: With two of its global market’s nation-states in what looks to be a protracted conflict, the company decided one of those territories had to be abandoned. The opening of McDonald’s in Russia symbolized the beginning of a new era of peace; its departure signals that era’s conclusion.
One of the questions McDonald’s leadership reportedly focused on these last few months was: Is continuing to operate in Russia good for the brand? The answer was no. That’s why the details of just what “de-Arched” means is going to define how Gover proceeds. Sure, he’s apparently agreed to operate under a “new brand.” But will there be something a bit familiar about it all the same? While McDonald’s wants all traces of its brand history erased, a connection to that history is clearly part of what makes it valuable. What’s Russian for “Golden Arcs”?