The Old Mc Donald's time to go?

Franchise India Bureau
Franchise India Bureau Sep 29 2017 - 3 min read
The Old Mc Donald's time to go?
Will the Souring big burger equation benefit Amit Jatia?

The tangy tussle between, recently reinstated, Vikram Bakshi, the MD of Connaught Plaza Restaurant Limited (CPRL) – a joint venture that managed US fast food major McDonald’s operations in North and East India finally left a bitter taste for CPRL.

McDonald’s has now finally parted ways by cancelling its franchise agreement with Connaught Plaza Restaurants Ltd, its equally owned joint venture with Vikram Bakshi that operated the US chain’s restaurants in northern and eastern India.

The recent reports stated that McDonald’s has taken away all branding, trademark, design and marketing policy rights from CPRL while culminating a 22-year relationship with Bakshi. This big burger battle has affected the taste buds of its investors and loyalists in India. It all started when McDonald’s terminated its equal partnership with Bakshi on 29 November 2013. The company was incorporated in 1995. The prime reason was Bakshi's confrontation at the board meeting of CRPL held in August 2013, where he was not re-inducted in the board as its MD and was ousted from the post as MD of the McDonald’s franchisee.

In India, CPRL owns 169 outlets, including 43 in and around the National Capital that have already been shut down. This will consequently affect about 6,500 direct jobs in India, and lead to the possible closure of McDonald’s restaurants in the northern and eastern regions, at least temporarily.

Some top company executives indicate that Amit Jatia, the vice chairman of Hardcastle Restaurants Pvt Ltd which holds the master franchisee for McDonald’s in West and South India for two decades is the prime contender to get the rights to operate the US chain’s restaurants in the North and East as well.

In a statement, McDonald’s said it was “committed to finding the right developmental licensee partner for North & East India”.

Recent Development

In a recent development the National Company Law Tribunal (NCLT), has asked Vikram Bakshi and Mc Donald’s to consider settling the dispute among themswlves so that the business at large is not affected. It is interesting to note that Bakshi, who was ousted as the CPRL MD in 2013 was reinstated back in 2017 after the NCLT’s interference. Today morning, Bakshi had said that they (CPRL) will not shut its outlets down even after the stipulated period.

The big burger battle

30 Aug 2013, McDonald’s terminated its JV with Bakshi

Bakshi dragged McDonald’s to Company Law Board

McDonald’s started arbitration proceedings against Bakshi in London

Number of outlets remains the same as of 2012 till now in the North and the East.

Total of 27 outlets opened in 2012 moved to just one more in 2017

Madhurima & Vikram Bakshi involved in a few legal cases for allegedly not honouring the commitments of food safety & expansion

NCLT reinstates Bakshi as MD of McDonald’s franchisee CPRL on 13 July, 2017

August 22’ 2017 McDonald’s said it was terminating its agreement with Connaught Plaza Restaurant (CPRL) due to alleged breach of franchise agreements.

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