McDonald’s Signs Agreement for 20 Restaurants in Moscow

McDonald’s restaurants of Canada signed a joint venture agreement with the Moscow City Council today that will allow the giant hamburger chain to open up to 20 fast-food restaurants in the Soviet capital beginning in 1989.

“McDonald’s is bringing more than just restaurants to the Soviet Union,” said George Cohon, president and chief executive officer of McDonald’s Canada, at the formal signing ceremony in the Moscow City Soviet (Council) chambers.

He said the McDonald’s system will introduce into the Soviet Union a new concept of service and efficiency.

Cohon said that negotiations to bring the Big Mac to Moscow began 12 years ago during the 1976 Montreal Olympics but that only recent changes in Soviet law easing foreign investment made conclusion of the deal possible.

The first McDonald’s is slated to open on Gorky Street near the Kremlin sometime in the second half of 1989. Eventually up to 20 will be built, but no deadline has been set for their construction.

Virtually all the ingredients will be locally grown. McDonald’s experts have been working with Soviet agricultural experts for the past year growing potatoes to meet McDonald’s standards.

“A Big Mac in Moscow will taste the same as a Big Mac in New York or London or Rio,” Cohon said.

The initial price will be about 2 rubles ($3.40) for a Big Mac or about 1% of the average monthly Soviet wage.

Under the agreement the Soviet City Council will have a 51% share and McDonald’s 49%.

The announcement today coincided with the opening of Hungary’s first McDonald’s restaurant in Budapest.

There had been rumors for months that McDonald’s would open a branch in Moscow, where fast food is virtually unheard of and even slow food can be hard to find. Dining out at a Soviet restaurant is usually a two- or three-hour affair, and reservations are an iron-clad rule.