McDonald’s settles with former franchise

Food service retailer McDonald’s India has acquired Connaught Plaza Restaurants Pvt Ltd (CPRL) as the firm completed a settlement reached with former joint venture partner Vikram Bakshi.

The development assumes significance as it ended a dispute with its JV partners with whom the firm had formed the CPRL, which managed the McDonald’s outlets in North and East India with 165 outlets.

In 2017, the food service retailer ended the franchise agreement with CPRL over non-payment of royalties which resulted in a legal battle.

Accordingly, the firm has decided to temporarily close McDonald’s restaurants in North and East India to conduct a comprehensive assessment of operational protocols and employee training.

“The existing managers and crew will continue to be employed during this temporary closure and will be actively involved in activities to re-open the restaurants.”

According to McDonald’s, the transfer of ownership and management is effective immediately. Robert Hunghanfoo has been appointed Head of CPRL, now owned by MIPL and its affiliate.

“During the transition, MIPL will be focused on two key areas - providing employees with clarity and confidence in their future at McDonald’s and leveraging McDonald’s global system expertise to fortify high operating standards for our local customers,” the statement said.

Bakshi had signed the JV as an equal equity partner with McDonald’s Corp in 1995, established the first McDonald’s restaurant in India in 1996.

McDonald’s remains committed to the opportunities in North and East India and

intends to facilitate future growth by continuing to actively progress finding the right ‘Developmental Licensee’ (DL) for the region.