A McDonald’s India franchise agreement covering 169 restaurants has been terminated.
A subsidiary of the American fast-food chain, McDonald’s India (MIPL) ended the arrangement with Connaught Plaza Restaurants (CPRL) which was the licensee for the brand in north and east India.
However, McDonald’s business in west and south India has not been affected as the master franchisee rights for those markets are owned by Westlife Development through its subsidiary Hardcastle Restaurants.
MIPL says it has issued a notice of termination to CPRL, its joint venture with Vikram Bakshi. This gives CPRL 15 days to stop using the McDonald’s system, including names, trademarks, designs, branding, operational and marketing practices and policies, food recipes and specifications, and associated intellectual property.
The move comes two months after CPRL shut 43 of the 55 McDonald’s restaurants in Delhi following its failure to renew their licences amid an ongoing legal battle between Bakshi and McDonald’s.
McDonald’s voted against the re-election of Bakshi as the MD of CPRL in 2013. He was reinstated after a challenge through the Company Law Board (now the National Company Law Tribunal) in which he accused McDonald’s of mismanagement and oppression.
Later that year, McDonald’s revoked the JV agreement and invoked action against Bakshi in the London Court of International Arbitration.
Refusing immediate comment on the development, Bakshi says CPRL is looking for a new developmental licensee partner for north and east India in a bid to rebuild the brand.