Raphael Stevens

While gas prices have soared in the wake of Russia’s invasion of Ukraine, so have electricity prices – particularly in some parts of the U.S. that have been big markets for Tesla’s EVs.
So, is it still true that it’s much cheaper to “refuel” an EV? CNBC crunched the numbers.

A driver uses a fast-charging station for electric in the cell phone lot at John F. Kennedy (JFK) airport on April 02, 2021 in New York City.
Spencer Platt | Getty Images

It has been true for years: Mile for mile, it’s cheaper — generally much cheaper — to recharge an electric vehicle than it is to refuel one with an internal-combustion engine.
That has been a key selling point for Tesla and other EV makers, particularly in times when gas prices have soared, such as now. But this time there’s a wrinkle: While gas prices have indeed soared in the wake of Russia’s invasion of Ukraine, so have electricity prices — particularly in some parts of the U.S. that have been big markets for Tesla’s EVs.

That raises a question: Is it still true that it’s much cheaper to “refuel” an EV? The charts below help us find the answer.
The first chart, using nationwide figures, provides a baseline. The others use data specific to Boston and San Francisco, two markets where EVs are popular — and where electricity tends to be more expensive than the national average.

The answer in all three cases is that — even with regional surges in the price of electricity — it’s still quite a bit more expensive to fill your gas tank than it is to charge your EV’s battery.
Electricity rates have roughly kept pace with gas price increases in Boston and San Francisco. Yet, on average across the U.S., adding 100 miles of range in your internal-combustion vehicle has become more expensive, relative to charging an EV an equivalent amount, over the last couple of months.
Is that likely to change? While oil prices are nearly certain to fall in coming months as producers increase output, it’s unlikely that the price of electricity will rise enough to make EVs less affordable over their life cycles than internal-combustion alternatives.

Using February data, Jeffries analyst David Kelley recently calculated that the total lifetime cost of ownership of an EV is about $4,700 less than that of an internal-combustion vehicle. He said that cost difference is likely to increase as more EVs come to market — and as battery prices continue to fall — over the next couple of years.

How we crunched the numbers

We had three questions in mind when we put together these charts:

How much does it cost to add 100 miles of range to the average ICE vehicle and the average EV?
How have those costs changed over the last three years? (Going back three years to February of 2019 gives us a prepandemic baseline.)
How have those costs varied between different parts of the U.S.?

For gasoline, the Environmental Protection Agency reported that the average new vehicle sold in the U.S. in 2020 had a combined fuel-economy rating of 25.7 miles per gallon. Driving 100 miles in that average vehicle would use 3.9 gallons of gas. (Figures for 2021 haven’t been released yet.)
On the electric-vehicle side, the EPA’s efficiency rating for EVs — called “MPGe”, for miles per gallon equivalent — gives consumers an idea of how far an EV can travel on 33.7 kilowatt-hours (kWh) of charge. Why 33.7 kWh? That’s the amount of electricity that is chemically equivalent to the energy in a gallon of regular gasoline.
The average MPGe rating for 2022-model-year EVs sold in the U.S. is about 97, so driving 100 miles in that hypothetical average vehicle would use 34.7 kWh of electricity.
The charts above compare how the price of 3.9 gallons of gas has changed relative to the price of 34.7 kWh over time, using monthly data from the U.S. Energy Information Administration (for gas prices) and the U.S. Bureau of Labor Statistics (for electricity rates) from February 2019 through February 2022.
– CNBC’s Crystal Mercedes contributed to this article.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Friday previewed next week’s earnings schedule and said investors should use it as a chance to offload unprofitable companies from their portfolios.
“If you still own the stocks of unprofitable companies … I’m begging you to use this chance, start by today, to do some selling,” the “Mad Money” host said.

CNBC’s Jim Cramer on Friday previewed next week’s earnings schedule and said that investors should use it as a chance to offload unprofitable companies from their portfolios.
The “Mad Money” host said that the market could be in for some pain next week after this week’s rallies, as investors digested the news of the Federal Reserve’s quarter-percentage-point interest rate hike, the ongoing Russia-Ukraine War and Covid outbreaks in Asia and Europe.

While investors shouldn’t sell off everything, next week could be a golden opportunity for investors to shuffle holdings around, Cramer said.
“If you still own the stocks of unprofitable companies that don’t even have any good cash flow and sell at high price multiples to sales, I’m begging you to use this chance, start by today, to do some selling and reposition yourself into more tangible companies with much cheaper stocks,” he said.
All earnings and revenue estimates are courtesy of FactSet.
Monday: Nike
Nike

Q3 2022 earnings release at 4:15 p.m; conference call at 5 p.m. ET
Projected EPS: 71 cents
Projected revenue: $10.6 billion

“I don’t expect Nike will actually have good numbers, but that’s now the conventional wisdom, which leaves open the possibility of an upside surprise,” Cramer said.
Tuesday: Nvidia, Adobe
Nvidia

Investor Day at 1 p.m. ET

“[Chief executive Jensen Huang’s] speech will define where tech is, where it’s going, and what are the boundaries that must be smashed,” Cramer said. “And he’ll smash them.”
Adobe

Q1 2022 earnings release after the close; conference call at 5 p.m. ET
Projected EPS: $3.34
Projected revenue: $4.24 billion

Cramer said that he believes Adobe will have better results than Wall Street is expecting, “but the standards have gotten ridiculously high for this fabulous company.”
Wednesday: General Mills, KB Home, Ollie’s Bargain Outlet Holdings
General Mills

Q3 2022 earnings release before the bell; conference call at 9 a.m. ET
Projected EPS: 78 cents
Projected revenue: $4.56 billion

“The food stocks are a diminishing group. … They’re hurt by inflation in every part of their manufacturing chain. A lot less defensive than they used to be,” Cramer said of General Mills and other food companies.
KB Home

Q1 2022 earnings release after the close; conference call at 5 p.m. ET
Projected EPS: $1.54
Projected revenue: $1.5 billion

Cramer said he expects that the company “blows away the numbers and even gets some recognition for doing so.”
Ollie’s Bargain Outlet Holdings

Q4 2021 earnings release after the close; conference call at 4:30 p.m. ET
Projected EPS: 66 cents
Projected revenue: $513 million

Cramer said that a problem Ollie’s could face is limited inventory if other retailers don’t have any unsold products for Ollie’s to take off their hands due to consumers willing to pay full-price for everything.
Thursday: Darden Restaurants
Darden Restaurants

Q3 2022 earnings release before the bell; conference call at 8:30 a.m. ET
Projected EPS: $2.11
Projected revenue: $2.52 billion

Listening to Darden’s call will show where consumers are choosing to spend their money after staying in during the pandemic, Cramer said.
Friday: University of Michigan Consumer Sentiment Index
The University of Michigan Consumer Sentiment Index reports numbers for March Friday after the preliminary index dropped to 59.7 earlier this month, the lowest level in nearly 11 years, according to Reuters. Cramer said if the consumer sentiment index number turns out to be “gloomy,” that means bad news for gardening and outdoor living companies like Home Depot and Lowe’s.

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Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Hims & Hers Health Inc: “Hims & Hers lose money … I’m not recommending stocks that are losing a lot of money.”

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DraftKings Inc: “[Kynikos Associates founder] Jim Chanos says it’s a great short. I think the time to short the stock was much, much higher.”

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Gilead Sciences Inc: “I know it looks very, very cheap. But you know what, that’s not why we buy drugs stocks. We buy drug stocks because they’ve got growth, and Gilead has none.”

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Friday broke down fresh technical analysis from veteran chartist Larry Williams, whose proprietary market indicators suggest that Google-parent Alphabet, Amazon and Coca-Cola are stocks to watch for.
“Right now, the charts as interpreted by Larry Williams, suggest we’ve got some bullish action coming in Google, Amazon and Coca-Cola. My view? I wouldn’t bet against him,” the “Mad Money” host said.

CNBC’s Jim Cramer on Friday broke down fresh technical analysis from veteran chartist Larry Williams, whose proprietary market indicators suggest that Google-parent Alphabet, Amazon and Coca-Cola are stocks to watch for.
“Right now, the charts as interpreted by Larry Williams, suggest we’ve got incredibly bullish action in Google, very good bullish action in Amazon and money in the bank action in what we call knockout, Coca-Cola. I would not bet against Larry Williams,” the “Mad Money” host said.

Cramer said that judging from Williams’ methodology, Alphabet and Amazon have held up better than other big tech names that have been beaten up during this year’s market volatility.
Here’s three separate analyses of the three companies’ current and expected performance. Cramer’s analysis of Alphabet is of the company’s C class stock with the ticker GOOG, not to be confused with the company’s A class stock GOOGL.
Alphabet (Google)
Here’s a look at Alphabet’s daily chart:

Arrows pointing outwards

Cramer said that the technology company has a “stable floor of support,” which lets Williams know that Alphabet’s shareholder base has continued buying the stock through market turbulence. “According to Williams, when a stock holds up like this while the broader market’s getting hammered, it’s one of the strongest patterns he knows,” Cramer said.

There are more signs that the stock is bullish, according to Cramer. First is the blue line at the bottom of the chart, called an on-balance volume indicator, which measures volume flow. This line shows that Alphabet stock volumes held above January lows in February and March, Cramer said.
When examining Alphabet plotted next to one of Williams’ indicators that measures professional accumulation of a stock, the stock is moving sideways while the indicator line is going higher —  another signal that the stock is bullish, Cramer said. Here is the chart:

Arrows pointing outwards

Amazon
Williams believes the “stock’s now bouncing hard off its lows and … it’s got more room to run,” Cramer said, adding that the stock has not performed as well as Alphabet.
Here’s Amazon’s daily chart plotted next to its seasonal pattern, which measures how stocks typically do at a given point in the year:

Arrows pointing outwards

“Just like with Google, this is exactly the time of year when Williams would expect a bottom based on the calendar,” Cramer said.
Coca-Cola
While Williams’ analysis suggests that Google and Amazon will have positive performances, Cramer acknowledged that tech stocks’ struggles this year could make those stocks unattractive for wary buyers. An alternative defensive stock is Coca-Cola, he said.
Here’s Coca-Cola’s daily chart plotted with the on-balance volume line:

Arrows pointing outwards

Williams believes that because the stock’s volume has increased even while Coca-Cola has lowered from its highs in the last couple weeks, “big institutional money managers are buying it aggressively,” Cramer said.
Cramer added that the beverage company’s seasonal pattern suggests that it will bottom soon, according to Williams’ analysis. Here’s Coca-Cola stock plotted with its seasonal pattern:

Arrows pointing outwards

“Coke is exactly the kind of stock that hedge funds love to own at this point in the business cycle, which is a key reason why it’s been able to outperform the major averages. Williams is betting that outperformance will continue,” Cramer said.
Williams also believes there’s a strong correlation between Coca-Cola and sugar, which is a major input of the company, Cramer said. Here’s a chart showing both Coca-Cola and sugar prices pushed forward about one year:

Arrows pointing outwards

“You might expect the stock to go down after sugar goes up because it’s a major input cost for them, but when you push the data forward one year, Williams finds that Coke’s stock follows sugar. If the pattern holds, it means that Coke can continue to rally,” Cramer said.
Disclosure: Cramer’s Charitable Trust owns shares of Alphabet (GOOGL) and Amazon.
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Disclaimer

Questions for Cramer?Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer’s world? Hit him up!Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, comments, suggestions for the “Mad Money” website? [email protected]

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Friday offered a list of five newly-public stocks he believes investors should add to his portfolio.
“If you’re willing to be disciplined in your approach, you’ve got my permission to sift among the rubble of last year’s IPOs and SPAC mergers,” the “Mad Money” host said.

CNBC’s Jim Cramer on Friday offered a list of five newly-public stocks he believes investors should add to his portfolio.
While he still sticks by his rule that buyers should stick to companies that turn profit and produce tangible things, “that’s a big ask for a company that just came public,” the “Mad Money” host said, adding that he was inspired by Renaissance Capital CEO Bill Smith’s newsletter to examine IPOs.

“They’re usually in growth mode, so it makes more sense for them to invest in their business than waste money on dividend payment,” Cramer said, advising investors to look at these newer companies’ free cash flow as an indicator of their ability to be profitable.
Cramer said he looked at traditional IPOs from 2021 and 2022, along with the 151 stocks in CNBC’s Post SPAC index, to find companies that meet the following criteria:

Are large enough companies to be worth highlighting
Had positive free cash flow in 2021
Trading below 40 times its free cash flow
Not Chinese, Russian or Cypriot stocks that could be geopolitically risky to own

Using the above criteria, Cramer narrowed the list of traditional IPOS from 2021 and 2022, along with the 151 stocks in CNBC’s post-SPAC index, to 380 larger stocks. He then cut out 42 where there wasn’t sufficient data to conduct an analysis. Then, after identifying 125 stocks with positive free cash flow in 2021, and whittling down the list further, he landed on five stocks that could be buying opportunities for investors.
Here’s the list:

Hayward Holdings
MarketWise
Ryan Specialty Group Holdings
Sovos Brands
Vivid Seats

“If you’re willing to be disciplined in your approach, you’ve got my permission to sift among the rubble of last year’s IPOs and SPAC mergers,” Cramer said.

Cramer previously in January highlighted 12 newly-minted stocks he believed could be profitable.
Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
Disclaimer

Questions for Cramer?Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer’s world? Hit him up!Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, comments, suggestions for the “Mad Money” website? [email protected]

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Auto companies most immediately impacted by the earthquake included Toyota and Renesas Electronics, a major supplier of semiconductor chips for the automotive industry.
The earthquake adds to already tumultuous times for the automotive industry involving supply chain problems due to Covid-19 and Russia’s invasion of Ukraine.
Toyota on Friday said it would suspend operations at more than half its operations across Japan.

A car dealership’s window is broken following a strong earthquake in Koriyama, Fukushima prefecture, Japan in this photo taken by Kyodo on March 17, 2022.
Kyodo| via Reuters

DETROIT – A major earthquake this week in Japan is causing additional problems for the already constrained global automotive supply chain, which continues to manage through problems caused by the coronavirus pandemic and Russia’s ongoing invasion of Ukraine.
As companies monitor and assess potential residual impacts of Wednesday’s 7.4 magnitude earthquake on their supply chains, auto companies most immediately impacted included Toyota Motor and Renesas Electronics, a major supplier of semiconductor chips for the automotive industry.

Research firm LMC Automotive expects the earthquake to lead to lower vehicle production this year of between 25,000 and 35,000 cars and trucks, adding to already-decreased expectations due to an ongoing shortage of semiconductor chips and the war in Ukraine.

“This is just another layer on top of an already fragile system where we’re seeing a lot of pressure on the manufacturing side of the business,” said Jeff Schuster, LMC’s president of the Americas. “It’s certainly something the industry didn’t need at this point.”
Toyota on Friday said it would suspend operations at more than half its plants across Japan. The world’s largest automaker by volume said 18 production lines at 11 plants (out of 28 lines at 14 plants) would be down for three days next week due to supply problems caused by the earthquake.
“Due to the parts shortage resulting from suppliers affected by the earthquakes, additional adjustments will be made to production operations in some plants in Japan as follows,” Toyota said in a statement.
The shutdowns were announced a day after Toyota cut production output by 150,000 units from April to June due to growing supply chain uncertainty.

For more than a year now, the global automotive industry has been dealing with a global shortage of semiconductor chips caused by plant shutdowns at the beginning of the coronavirus pandemic. The chips are the most notable issue amid global supply chain problems caused by the pandemic, rising costs, inflation and Russia’s invasion of Ukraine.
“The top line for this is it’s another impact on an already constrained system,” said Stephanie Brinley, principal automotive analyst at S&P Global Mobility, formerly IHS Markit. “It does appear to be a short-term impact … but it’s just not industry needs to deal with right now.”
Renesas, which reportedly makes nearly a third of the microcontroller chips used in cars globally, operates three plants close to the earthquake’s epicenter in northeast Japan, according to the company.
The Tokyo-based semiconductor supplier said it’s attempting to restart the plants and return them to pre-earthquake production volumes by Wednesday, including one as early as Sunday.

The importance of Renesas in the global automotive semiconductor supply chain was highlighted last year following a fire at one of the plants caused automakers such as Ford Motor to significantly cut production at facilities, including many in North America.
Ford teams “have been monitoring the situation very closely and actively working to determine what, if any, impact this might have on our operations,” a company spokesperson said Friday. General Motors released a similar statement.
Smaller Japanese automaker Subaru on Friday said it would suspend production Friday and Monday at two auto assembly plants and an engine and transmission plant due to the earthquake.
“Subaru Corporation will temporarily suspend production at its automobile manufacturing facilities due to interruptions in the supply of certain parts, as operations of the supplier factories for those parts have been affected by the earthquake,” Subaru said in a statement.
Spokespeople for Japanese automakers Honda Motor and Nissan Motor said there were little to no impacts to their operations due to the earthquake. A Honda spokesperson said the company suspended a night shift at one Japanese plant when the earthquake occurred.

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Pfizer CEO Albert Bourla received $24.3 million in total compensation for 2021, a 15% increase over the prior year.
Bourla’s total equity holdings, nearly 597,000 shares, are worth more than $32 million as of Thursday’s closing price $54.24.
He’s entitled to a golden parachute of nearly $113 million, which was valued at end of December 2021.

Pfizer CEO Albert Bourla addresses a press conference after a visit to oversee the production of the Pfizer-BioNtech COVID-19 vaccine at the factory of U.S. pharmaceutical company Pfizer in Puurs, Belgium April 23, 2021.
John Thys | Pool | Reuters

Pfizer CEO Albert Bourla received $24.3 million in total compensation for 2021, a 15% increase over the prior year as the company’s full-year profit more than doubled with the successful rollout of its Covid vaccine.
Bourla took home a cash incentive of $8 million on top of his salary of $1.69 million. He also received stock and options totaling $13.2 million as well as $1.38 million in other compensation.

Bourla’s total equity holdings, nearly 597,000 shares, are worth more than $32 million as of Thursday’s closing price of $54.24. He’s also entitled to a golden parachute valued at nearly $113 million as of Dec. 31, if the company is sold and he loses his job as a result.
Bourla also received more than $336,000 for home security and more than $60,000 for air travel. His total salary is 262 times higher than the median compensation for a normal employee at Pfizer.
Pfizer booked a profit of nearly $22 billion in 2021, double the previous year as the company’s Covid vaccine became the most widely administered shot against in the U.S. and the European Union. Sales from Pfizer’s Covid vaccine totaled $36.7 billion in 2021, making up about 45% of its annual revenue of $81.2 billion. Pfizer is projecting another $32 billion in vaccine sales this year.

The shot was developed with BioNTech, its German partner, who created the technology underlying the vaccine. Pfizer and BioNTech splits profits from the vaccine equally.
Pfizer’s shot was the first Covid vaccine to receive emergency authorization from the Food and Drug Administration in December and also the first to receive full approval from the FDA. The eligibility age has been gradually lowered to everyone over 5 years old.

Pfizer’s Covid treatment pill, Paxlovid, is also expected to become a hit, with the company projecting at least $22 billion in sales.
The vaccine maker’s windfall from the shots are controversial with activist groups, which are calling for the companies to share their intellectual property with developing nations to help boost vaccination coverage. Oxfam America, in a proposal for Pfizer’s annual meeting, has called for shareholders to back a feasibility study on transferring the underlying vaccine technology.
Pfizer’s board of directors has called on shareholders to vote against the proposal, saying transferring the technology behind the shots requires highly skilled local partners that have the know-how to manufacture them. The company has committed to suppling 2 billion vaccine doses to poorer nations by the end of 2022.

CNBC Health & Science

Read CNBC’s latest global coverage of the Covid pandemic:

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For some Western brands like Burger King, Subway and Marks & Spencer, exiting the Russian market is easier said than done.
Complex franchise agreements mean that they are unable to suspend operations in the market even as they withdraw corporate support.
“Some franchisees do not want to stop operation because they claim that the Russian people are not the problem,” franchise and distribution expert Craig Tractenberg told CNBC.
It comes amid a mass exodus of Western brands from Russia following Moscow’s invasion of Ukraine and resultant sanctions.

The Burger King name appears in Russian outside a Burger King fast food restaurant in Moscow, Russia, on Friday, April 5, 2013.
Bloomberg | Getty Images

Ukrainian President Volodymyr Zelelnskyy in his address to U.S. Congress Wednesday reiterated calls for all global brands to exit Russia — a market “flooded with [Ukrainian] blood” — as part of ongoing efforts to apply economic pressure to the pariah state.
More than 400 companies have announced their withdrawal from Russia since the launch of its invasion of Ukraine on Feb. 24, according to a list compiled by Yale School of Management.

For some brands, however, a clean break is easier said than done.
Fast food giants Burger King and Subway, British retailer Marks & Spencer and hotel chains Accor and Marriott are among a number of companies restricted from withdrawing amid complicated franchise agreements.
“Unlike a company-owned operation, a franchise company going into an international market makes a binding, long-term contractual commitment to a sophisticated counter-party, typically a franchisee or licensee,” Dean Fournaris, partner in Wiggin and Dana’s franchise and distribution practice, told CNBC.

Brands with only company-owned operations are better positioned to shut down locations quickly.

Earsa Jackson
Member of Clark Hill’s franchise and licensing team

Under such contracts, a company — known as a franchisor — outsources its brand to a counter-party — known as a franchisee — which then owns and operates the brand in a specific location. Companies looking to expand their footprint in a particular market can find such agreements make sense from an operational or financial perspective. But, as legally binding contracts, once signed, they can leave little room for maneuver.

That has complicated some Western brands’ efforts to step back from Russia — even as many peers have paused operations or exited the market entirely over their rejection of Moscow’s invasion and logistical challenges that have arisen as a result.

“Brands with only company-owned operations are better positioned to shut down locations quickly because they do not have to deal with the layer of the franchise relationship,” Earsa Jackson, a member of Clark Hill’s franchise and licensing team, said.

Halting corporate support

Burger King, which is owned by Restaurant Brands International, announced last week it had halted corporate support for its 800-plus franchised restaurants in Russia and that it would refuse approvals for any expansion. However, the outlets remain in operation under a local master franchisee.
Subway, similarly, has no corporate outlets in Russia but its approximately 450 independently-owned franchised restaurants continue to operate in the country. That as competitors like McDonald’s, which owns the majority of its restaurants in Russia, said it would temporarily close 850 of its restaurants in the country, at an estimated loss of $50 million per month.

The Subway name appears in Russian on a sign outside a Subway fast food restaurant in Moscow, Russia, on Sunday, April 7, 2013.
Bloomberg | Getty Images

“We don’t directly control these independent franchisees and their restaurants, and have limited insight into their day-to-day operations,” Subway said in a statement.
Retailer Marks & Spencer, meanwhile, which has 48 stores in Russia, told CNBC it has ceased supplying products to its franchisor, Turkish company FiBA, but the two remain “in discussions” about the brand’s continued operations there.
Hotel chains Accor and Marriott have also both suspended the opening of new locations in Russia but their existing locations remain in operation by third parties.

A legal battlefield

While all of those companies have expressed dismay at the war and made various commitments to redirect Russian profits or make separate donations to Ukrainian refugees, their continued presence on the Russian high street remains largely at the discretion of their franchisors.
“Some franchisees do not want to stop operation because they claim that the Russian people are not the problem and the brand should continue to serve its customers,” Craig Tractenberg, a partner at the law firm Fox Rothschild, said.
And with most franchisors having made significant investments in, and continued commitment to, their local outlets, any move on their side to cease operations seems unlikely.

Franchise companies and their brands are in a really tough spot when it comes to Russia.

Dean Fournaris
Partner at Wiggin and Dana

“If the franchisee remains ready and willing to perform, a franchisor’s unilateral decision to close a location may result in litigation due to the franchisee’s lost business opportunity,” Clark Hill’s Jackson said.
That leaves many Western brands in a predicament as to how to manage their legal duties while safeguarding their brands in a global landscape that is overwhelmingly opposed to Russia’s war.
“Franchise companies and their brands are in a really tough spot when it comes to Russia. On the one hand, there is a rising public and governmental sentiment in the West that all non-essential business with and within Russia should cease pending some future undetermined event, like a cease-fire or Russian withdrawal from Ukraine,” Fournaris said.
“At the same time, a market withdrawal from Russia would be viewed quite differently by the Russian government and more importantly its people,” he added.

Managing brand reputation

A ratcheting up of Western sanctions and further disruptions to supply chains could offer franchisors some hope of a contractual get-out as franchised brands may no longer have the means to operate.
“Some agreements contain excuse of performance language which could benefit franchise brands. For example, if supply chain issues make it impossible to perform, franchisors may argue that performance is excused,” Jackson said.

A visitor walks past the entrance to a Marks & Spencer Plcstore in the Afimall City shopping and entertainment complex at “Moscow City” business center in Moscow, Russia, on Friday, May 17, 2013.
Bloomberg | Getty Images

But more likely, companies will be left weighing the legal and financial implications of terminating their contract with the wider longevity of their brand.
“This business decision may overlap with a moral decision. Ultimately, the question is which decision best protects the brand,” Tractenberg said.
Meantime, the fallout could mark a new era for franchise agreements, with participants perhaps more likely in the future to make provisions for conflict risks such as “civil unrest, insurrection and related events.”
“The trademark provisions could be argued to support closure where the brand would be blemished by continued operation or aiding and abetting criminal activity,” Tractenberg added.

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