Global fastfood chain McDonald’s will be shutting down 43 out of the 55 outlets in Delhi from Thursday, due to the expiration of its licences.
In an official statement, it said:
The Board of Connaught Plaza Restaurants Private Limited (or “CPRL”, McDonald’s licensee in North and East India) is working to obtain the required licenses. Pending this, CPRL is temporarily suspending the operations of the affected restaurants.
According to ET, this shutdown will affect the livelihood of as many as 1,700 of its employees.
A PR statement by McDonald’s also said that CPRL may retain its employees and pay them salaries during the period of suspension, but The Quint hasn’t been able to verify this information.
The former managing director CRPL, Vikram Bakshi said:
It’s unfortunate, but operation of 43 restaurants operated by CPRL has been temporarily suspended.
McDonald’s and Vikram Bakshi have been engaged in an ongoing tiff since 2013.
The US-based fast food chain came to liberalised India in 1995, in a joint venture with Bakshi, and started operating in north and east India.
But in 2013, McDonald’s voted against the re-election of Bakshi as the managing director. Bakshi challenged the decision in the Company Law Board (CLB), Delhi, alleging mismanagement in McDonald’s operations and oppression under Sections 397 to 402 of the Companies Act, 1956.
McDonald's has since been pursuing arbitration against Bakshi in the London Court of International Arbitration.
The closure is expected to have an adverse impact on McDonald’s.
Brand strategist Harish Bijoor told ET that unless McDonald's sorts out its legal battle, things might worsen. "Every passing day is a slur on the front-end brand," he said, adding that there is nothing really bigger than the brand.
(With inputs from ET )
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