After 20 Years, McDonald Shuts 43 Outlets in Delhi

The global food giant McDonald which had made headlines in 1997 when it opened first outlets in India at Delhi with veg burgers replacing its iconic beef burgers elsewhere, hit an unexpected controversy almost 20 years later over ownership issue.

The franchisee given to Connaught Plaza Restaurants Pvt Ltd (CPRL) in North and Eastern India has run into trouble over the ownership of CPRL, which had been jointly owned by Vikram Bakshi and McDonald’s.

Refusing to renew the licence, McDonald’s told media that the restaurant licenses of these McDonald’s restaurants in Delhi “expired”, bringing curtains down on two-year-old controversy and ending 20-year-old partnership with Vikram Bakshi.

McDonald franchisee Vikram Bakshi at loggerheads with parent firm

McDonald’s India has been fighting over the control of CPRL and arbitration proceedings to settle the issue with Bakshi failed at the London Court of International Arbitration. With the expired licences, McDonald’s has decided to shut all the 43 restaurants owned by the joint venture.

McDonald’s India Pvt Ltd (MIPL) spokesperson Barry Sum said, “The Board of CPRL is working to obtain the required licenses. Pending this, CPRL is temporarily suspending the operations of the affected restaurants,” and all the 43 restaurants will face closure. MIPL said all the 1700 employees who will be affected will be paid salaries as usual until the suspension is revoked.

The McDonald’s franchisee for south and west is managed by Amit Jatia. Currently, McDonald’s has more than 320 million customers a year.

However, last year, its reputation faced critical test when news over its use of beef oil for french fries was assailed all over the country where Hindus shun beef and any beef-related products.

McDonald’s was followed by the entry of other US eateries such as Domino’s Pizza which has more than 500 restaurants across India, while KFC has more than 300 restaurants.

Dunkin Donuts has more than 30 outlets in India and Burger King has presence in major cities like Delhi and and Bangalore with more than 10 restaurants.