News: 18 McDonald's outlets reopened amidst ongoing rift


18 McDonald's outlets reopened amidst ongoing rift

CPRL reopened 18 of the 21 McDonald's outlets in the capital, which have had received health licenses, on Tuesday. Read on to know more.
18 McDonald's outlets reopened amidst ongoing rift

People Matters previously reported about the ongoing internal rift between McDonald's and one of it's Indian partners. 

McDonald's had entered India in 1996 as part of a joint venture between Oak Brook III and two Indian partners: Connaught Plaza Restaurants Ltd which handles the North and East franchise business, and HardCastle Restaurant which manages West and South Indian outlets. 

In 2013, McDonald's had voted against the reelection of Vikram Bakshi as the Managing Director of CPRL. Bakshi had challenged the same in Company Law Board, which is National Company Law Tribunal (NCLT) now, and NCLT had reinstated Bakshi as the MD of CPRL. Most recently, citing non-payment of royalties as the main reason, McDonald's had on August 21 terminated contract with CPRL.

As a consequence, 43 McDonald's outlets in Delhi were supposed to close by 6th September. But as per the recent media reports, 18 of those 43 outlets have reopened in the capital. 

Apparently, the decision was taken by the board of Connaught Plaza Restaurants Ltd, under the chairmanship of Justice GS Singhvi, and had passed a resolution on September 17th to reopen 21 outlets for which they had received the health licenses. And of those, 18 had opened on Tuesday.

As part of the termination of the contract with CPRL, McDonald's had stated that CPRL would not be authorized to use McDonald's’s branding, trademark, design, and marketing policy within 15 days of the termination notice, and which is why the closure of the 43 outlets in the national capital was 6th September. However, all the outlets under CPRL which are 169 in number, continue to operate.

NCLT had directed both the sides to wait till Thursday (21st September, 2017) when National Company Law Appellate Tribunal (NCLAT) would hear Bakshi’s interim plea along with the main appeal by McDonald's. 

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Topics: C-Suite

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