McDonald's said it is temporarily suspending operations at its three locations in the Crimean peninsula and is offering to transfer all of its employees to Ukraine.
In a statement, McDonald's said unspecified manufacturing problems forced the closures, adding it that hopes the problem can be resolved and the facilities reopened soon.
In the meantime, the U.S.-based fast food chain offered its Crimea employees the same positions and salaries at its locations in Ukraine. It also offered to pay relocation expenses and three months of housing.
Crimea was annexed last month by Russia, a move condemned and not recognized by Washington and its allies. The U.S. has imposed economic sanctions on Moscow in response.
The controversy has raised concerns among some in the Black Sea region that Western companies will be reluctant to do business there.