DP Eurasia, the Dutch company responsible for the Domino's Pizza master franchise in Turkey, Russia, Azerbaijan, and Georgia, says its Russian subsidiary DP Russia has gone bust and is filing for bankruptcy.

The cause of the bankruptcy has been attributed to the mounting challenges faced by DP Russia in running its business in the face of the impact of international sanctions.

Once the bankruptcy process is completed, DP Eurasia will join hundreds of other multinational company’s exit from the Russian market. The Russian unit's external debt of RUB520mn has been entirely settled by the Turkish subsidiary using cash reserves.

The decision to declare bankruptcy follows on from DP Eurasia's earlier attempts to exit Russia, something that is becoming increasingly difficult to do. The Kremlin has introduced rules that demand foreign owned companies offer at least a 50% discount to potential buys on their fair valuation. In addition, departing foreign companies have to make an additional payment of 10% of the value of the company to the state “voluntarily”. And any deal that includes transferring funds abroad has to be approved by the Central Bank of Russia (CBR) where there is a considerable backlog of applications, according to bne IntelliNews sources in Russia.

The company initially reported the intention to exit on December 28, 2022. At that time, the company highlighted its ongoing efforts to negotiate a potential sale of its Russian assets. However, the outcome of these negotiations remained uncertain.

DP Eurasia announced in March that it would cease collecting royalties and making investments in the Russian Federation from the Domino brand. The introduction of Domino's Pizza to the Russian market dates back to 1998, with the opening of the first branch. Since then, the network has expanded, boasting approximately 170 restaurants located throughout the country.