News: McDonald's to shut 43 outlets in Delhi, but will retain employees

Staffing Recruitment

McDonald's to shut 43 outlets in Delhi, but will retain employees

However, McDonald's has clarified that employees of affected restaurants are retained and CPRL will pay them their salaries during the period of suspension.
McDonald's to shut 43 outlets in Delhi, but will retain employees

There is sad news for Delhi. Burger lovers will have to look for other options or skip ordering burgers if they want one from McDonald’s. As per ET report, McDonald’s, one of the most common go-to burger joints in Delhi has decided to shut 43 outlets. McDonald’s has about 55 outlets in the city.

The shutdown will also impact the livelihood of 1700 employees who operate out of the 43 outlets, according to the media report. And this is because of a spat between Connaught Plaza Restaurants (CPRL) and McDonald’s which has been brewing since 2013. CPRL is a 50-50 local Joint Venture between Vikram Bakshi and McDonald’s that operates the fast food chain in the North and East India.

Upon reaching out to McDonald's India Pvt Ltd (MIPL), they clarified that "McDonald’s is committed to ensuring that our restaurants are operating in full compliance with McDonald’s standards and applicable regulations. The Eating House Licenses of a number of McDonald's restaurants in Delhi have expired. The Board of Connaught Plaza Restaurants Private Limited (or “CPRL”, McDonald’s licensee in North and East India) is working to obtain the required licenses. Pending this, CPRL is temporarily suspending the operations of the affected restaurants. We apologize for the inconvenience this has caused. Our greatest concern is always for our customers and employees, and we are committed to doing what it takes to ensure compliance. It’s our understanding that CPRL has notified the key affected stakeholders including employees, landlords and suppliers before the temporary suspension started on June 28th. India continues to be an important market for McDonald’s and we are committed to working with CPRL to resolve the issue as soon as possible. The comment in the story on employees becoming jobless is erroneous. We understand that CPRL is retaining the employees of affected restaurants and will pay them their salary during the period of suspension."

Hardcastle Restaurants Pvt. Ltd. (HRPL). has a Master Franchisee relationship with McDonald’s Corporation USA and has rights to own & operate McDonald’s restaurants in India’s West and South markets since its inception in 1996. HRPL is a direct subsidiary of Westlife Development Limited (WDL), a company listed on the BSE with a focus on putting up and operating Quick Service Restaurants (QSR) in India and currently operates McDonald’s through 252 restaurants (as of 31 December 2016) across 34 cities and 10 states in west and south India.

There will be business-as-usual for the West and South of India for McDonald’s.

Vikram Bakshi told ET that, "It's unfortunate, but operation of 43 restaurants operated by CPRL has been temporarily suspended." As per reports, Bakshi and his wife are on the CPRL board and McDonald's has two representatives on it.

ET quoted sources as saying the CPRL failed to get the mandatory regulatory health licences renewed because of the infighting between Bakshi and McDonald's. Bakshi was expelled as managing director of CPRL in August 2013 and has been mired in a protracted legal fight with McDonald's. The verdict is not out. McDonald's has been pursuing arbitration against Bakshi in the London Court of International Arbitration.

Meanwhile, shutting down of the outlets will hurt McDonald's business in Delhi. 

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Topics: Staffing Recruitment

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