Hard Rock finds itself in a hard place with Russian cafés in operation
As Hard Rock Casino Northern Indiana prepares to celebrate its one-year anniversary, some of its workers have concerns about their company’s ongoing business operations in Russia in light of the unprovoked invasion and occupation of Ukraine.
“We’re all just regular, local, working folk here at the Gary location, without a clear grasp of how the Hard Rock corporate policies work regarding their franchise locations,” one worker told me. “The Hard Rock mission, mottos and values — Love All, Serve All; All Is One; Save the Planet; and Take Time to Be Kind — are all at odds with doing business in Russia.”
“If they really meant it, they wouldn’t be doing business in Moscow or providing any support that has anything to do with the Hard Rock name there,” the worker said. “Otherwise they are simply marketing slogans aimed at both customers and employees alike. No one here has heard or read of any official statement from the company on the Ukraine war. And there is no statement on the Hard Rock website about closing its Moscow operation.”
Two company-related operations continue to do business in Russia — Hard Rock Cafe Moscow and Hard Rock Cafe
St. Petersburg, according to the company website. Established in 2003, the three-floor Moscow cafe is located a short drive from Red Square and the Kremlin. The St. Petersburg cafe was founded as “the Russian window to Europe and is rightfully considered to be the most European city in Russia.”
Hard Rock International finds itself stuck between a rock and a hard place with this delicate issue. When I asked for the company’s policy stance, it responded immediately: “Hard Rock will suspend all future investment and development
in Russia and donate all profits from the two franchise locations in Russia to humanitarian causes in Ukraine. We started in mid-March.”
“Hard Rock International joins the millions of people around the world condemning the unprovoked attack on Ukraine and its people. We are deeply saddened about this humanitarian crisis and have pledged to ‘Turn it Up’ at participating Hard Rock Cafes worldwide to benefit World Central Kitchen for ongoing relief in the region.”
I asked for further clarification of the company’s two properties in Russia.
“It’s important to know that they are NOT HARD ROCK PROPERTIES. They are owned by a franchisee. They license our brand name,” a company spokesperson replied via email.
“I know it’s only two restaurants in two Russian cities, but there’s a lot at stake here in the big picture,” the local Hard Rock employee said. “This war is being watched closely by dictators worldwide, in North Korea, Argentina, or potential American presidential candidates. Anything we can do to keep Russia feeling the pain of war and the consequences of it should be done.”
Almost 1,000 international companies have curtailed operations in Russia since late February, but many corporations remain in business for different reasons, according to an ongoing analysis by the Yale School of Management.
“When this list was first published the week of February 28, only several dozen companies had announced their departure. We are humbled that our list helped galvanize nearly 1,000 companies to withdraw in the two months since,” its website states.
Since the invasion of Ukraine began, the database has been tracking the responses of more than 1,200 companies. The list is updated continuously by a team of experts, research fellows and students at the Yale Chief Executive Leadership Institute to reflect new announcements from companies.
“Almost 1,000 companies have publicly announced they are voluntarily curtailing operations in Russia to some degree beyond the bare minimum legally required by international sanctions — but some companies have continued to operate in Russia undeterred,” the site states.
One of those companies is Hard Rock, which has earned an F grade from the Yale analysis, last updated Tuesday, which initially began its rating system with a simple “withdraw” versus “remain” assessment. It now consists of five categories, graded on a school-style letter scale of A-F for the completeness of withdrawal. It uses five corresponding terms to grade companies, from “withdrawal” to “suspension” to “scaling back” to “buying time” to “digging in.”
Hard Rock is labeled as “digging in.”
“I think it’s a legitimate concern,” said the local Hard Rock employee, who I’m not identifying to protect his job status.
I agree this is a legitimate concern for employees of international companies continuing to operate in Russia. It’s also a legit concern for customers of these corporations who must determine if they should continue to patronize these businesses. CEOs and board of directors from these corporations have had to make the decision whether to remain in operation, or not, weighing several factors including public image, personal values, smart business, and global peace.
Jeffrey Sonnenfeld, founder of Yale’s Chief Executive Leadership Institute, which created the extensive database, has a history of holding CEOs accountable for their decisions regarding key social issues. Russia’s invasion of Ukraine is another opportunity for corporations to demonstrate, or reveal, their loyalties and values. Some corporations have lost billions of dollars and assets with their decision to scale back or withdraw business in Russian cities. Other companies have tried to find a compromise to stay in business yet still support Ukraine.
As employees of Hard Rock Casino Northern Indiana prepare for their one-year anniversary celebration May 14, some of them are singing the blues about their corporate leadership in regard to those Russian properties still in business.
“I’m probably jaded but there is a big difference between what people say they will do and what they actually do,” one worker said.