Now, McDonald’s and Vikram Bakshi spar over suppliers
In order to exercise its contractual rights and enforce the closure of 169 restaurants, McDonald’s India is impressing upon its vendors to stop transacting with Connaught Plaza Restaurants Pvt. Ltd (CPRL), the north and east India licensee of the American burger chain.
CPRL is a joint venture between McDonald’s India and Vikram Bakshi.
In a letter to all the suppliers, the Indian unit of the US-based fast food chain said that CPRL is no longer permitted to operate McDonald’s restaurants and that it must cease the use of McDonald’s intellectual property.
“As the master franchisor in India, earlier this week MIPL informed CPRL’s suppliers that we have terminated our franchise agreements with CPRL for all 169 restaurants in North and East India. As such, CPRL must cease the use of the McDonald’s system effective September 6. CPRL is not permitted to operate McDonald’s restaurants,” said McDonald’s India, in an email response to Mint’s queries on asking vendors to cut back supplies to CPRL.
McDonald’s India, on 21 August, had terminated its franchise agreement with CPRL for 169 restaurants across north and east India.
“This will disrupt the supplies to 169 restaurants as the food recipes and food specifications are the intellectual property of McDonald’s India; CPRL is no longer authorised to use them ,” said a person familiar with the development, on the condition of anonymity.
In an emailed statement Bakshi said, “We have been reliably informed by suppliers to CPRL that they have received letters from Robert Vee Chong, a Director on the board of MIPL, indirectly pressurising them to stop supplies to 169 restaurants run by CPRL.”
However, he added that the suppliers do not have agreements with MIPL. “They take their orders from CPRL, raise invoices to CPRL and receive their payments from the latter. MIPL is not permitted by law or by any authorisation from CPRL to discharge any action on behalf of CPRL. They would need a BOD (board of directors resolution) for that and they do not have any that.”
Key vendors of McDonald’s India include Vista Processed Foods Pvt Ltd which supplies chicken, vegetable patties and fresh produce, Schreiber Dynamix Dairies Ltd (cheese), Cremica Foods Industries Limited (sauces), Mrs. Bector Food Specialties (buns) and Amrit Foods (dairy products). Radhakrishna Foodland (P) Ltd. is the logistics and distribution partner for north and east India.
Spokespersons at Amrit Foods, Schreiber Dynamix Dairies and Cremica Foods declined comment on the development. Bhupinder Singh, CEO at Vista Processed Foods did not respond to an e-mailed query. Calls and text messages to a spokesperson of Mrs. Bector Food Specialties went unanswered.