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21
August 2017
McDonalds
India announced it had terminated its franchise agreement with Vikram Bakshi's
Connaught Plaza Restaurants. The 169 restaurants operated by the latter will
have to stop using the McDonlad's brand name within 15 days. The Total Investment & Insurance Solutions
Connaught
Plaza Restaurants Pvt Ltd (CPRL) runs McDonald's outlets in northern and
eastern India. McDonald's India it was on the lookout for a new partner.
"Today
we have issued the CPRL board a notice of termination of the franchise
agreements for 169 McDonald's restaurants operated by CPRL in North and East
India. This includes all restaurants impacted by the recent failure to renew
the Eating House Licenses," McDonald's India said in a statement. The Total Investment & Insurance Solutions
On
June 29, the company had temporarily suspended operations of more than 40 of
its restaurants in Delhi after the 'Eating House Licences' of a number of
outlets expired.
"As
a result, CPRL is required to cease using the McDonald's system (including
proprietary rights in McDonald's names, trademarks, designs, branding,
operational and marketing practice and policies and food recipes) and its
associated intellectual property in relation to these restaurants within 15
days of the termination notice," it said.
MIPL
said it was compelled to take this step because CPRL had materially breached
the terms of the franchise agreements relating to the affected restaurants and
had failed to remedy the breaches, despite being provided with an opportunity
to do so.
The
announcement assumes significance after the National Company Law Tribunal
(NCLT) on July 13 restored Vikram Bakshi as Managing Director of CPRL.
CPRL
is a 50:50 joint venture (JV) between MIPL and Bakshi, who was removed as MD in
August 2013. McDonald's India and Bakshi have for long been embroiled in a
fight over the control of CPRL. The Total
Investment & Insurance Solutions
McDonald's
India said the company will try and mitigate impact on the employees in these
restaurants. The Total Investment & Insurance
Solutions
"We
understand that this action brings uncertainty for many. As we proceed to
exercise our legal and contractual rights consequent on termination, a priority
will be to mitigate impact on affected parties such as employees, suppliers and
landlords and we are open to working with CPRL to achieve this," the
statement said. The Total Investment & Insurance
Solutions
McDonald's
India said it was scouting for a new partner to re-establish a profitable
business in the north and east of the country.The Total Investment & Insurance Solutions
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