One of the successful and renowned fast-food giant, Mcdonald’s, decided soon to shut its 43 outlets based in Delhi last week.
The decision came after a negative turnaround amid CPRL’s (Connaught Plaza Restaurants Private Limited) Vikram Bakshi and the U.S.-based fast food giant, Macdonald’s. Both the organizations have 50:50 joint venture among them that is operated by Bakshi. Looking at its consequences, it will impact the livelihood of 1,700 employees.
McDonald’s in statement said that, CPRL may hold its workforce and disburse them for the period of suspension. The licenses of various McDonald’s outlets in Delhi have expired. However, CPRL is functioning to get those mandatory licenses. Till then the operation of the outlets will be suspended. Thus, owing to trending legal disputes, suspension of restaurant operation is a cooperative judgment of CPRL’s board of directors.
India has been a crucial market for McDonald’s and we are dedicated to work with CPRL to clarify the concerns as early as possible.
Bakshi, while talking on the issue, said, “It’s adverse, but functioning of 43 restaurants operated under CPRL has been provisionally suspended”.
McDonald’s has two of its delegates on the CPRL board. The decision of close down was concluded in a board meeting through Skype last week.
The fast-food giant has been also facing concerns related to quality and Hygiene since 2013. MacDonald’s came into action in 1995 through a joint venture with Bakshi and started its operation in East and North Indian regions. In 2013, the fast-food giant casted its vote against Bakshi to keep him away from the position of Managing Director.
Bakshi confronted the verdict in the Company Law Board (CLB), Delhi, claiming mismanagement in the operations of McDonald’s and oppression under Sections 397 to 402 of the Companies Act, 1956. McDonald’s is from then been chasing the settlement aligned with Bakshi in the London Court of International Arbitration.
Harish Bijoor, the Brand strategist, said that till the time McDonald’s clear this legal battle, things might get worse. And it would directly impact on McDonald’s sale in the Indian market.