McDonald's likely to challenge NCLT order on Vikram Bakshi

Ruben Hill
August 21, 2017

The local partner "has failed to remedy the breaches, despite being provided with an opportunity to do so in accordance with the agreements", McDonald's India Pvt said.

The fast food chain's Indian subsidiary said it was terminating its agreement with Connaught Plaza Restaurant Ltd (CPRL), alleging breach of contract and payment defaults. McDonald's India had a 50:50 joint venture with CPRL, a company led by Vikram Bakshi.

The US food giant has another franchise agreement with Hardcastle Restaurants Pvt Ltd, which operates 261 McDonald's outlets in western and southern India.

The fast food restaurant market in India is worth some US$1.5 billion and growing at around 15 per cent a year, according to Delhi-based consulting firm Technopak.

The outlets run by CPRL will have to stop using the McDonald's brand name in 15 days.

Connaught Plaza in a separate statement said it's considering "appropriate legal remedies" in response. Calling it a "desperate action" by McDonald's, he said: "This is a completely contemptuous, malafide and yet another oppressive act indulged in by the McDonald's Corporation".

That said, the future of our burger and fried is in the doldrums and we can only pray that a common consensus - sans any outlet shuttering - is reached!

McDonald's and Bakshi have been at loggerheads over control of CPRL and an arbitration proceeding is being pursued by the food chain at the London Court of International Arbitration in this regard, where the matter is pending.

The latest license termination comes after McDonald's shut down about 43 restaurants in Delhi on June 29 amid the infighting between the chain and CPRL.

Bakshi was removed as MD of the company in August 2013. McDonald's said that Bakshi did not take the company's approval before pledging his shares.

"It's unfortunate, but operation of 43 restaurants operated by CPRL has been temporarily suspended", the Economic Times quoted Bakshi as saying. This brings the fate of 169 outlets in North and East India under cloud, which would need to now.

Other reports by Click Lancashire

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