McDonald's Outlets to Shut Today as Termination Notice Period Ends

I'm loving it! Some McDonald's outlets open despite licence cancellation

Meanwhile, the National Company Law Tribunal (NCLT) on Tuesday issued a show-cause notice to fast food major McDonald's Corporation and its Indian arm over the contempt plea filed by their estranged Indian partner Vikram Bakshi.

A spokesperson for McDonald's India, which had cancelled the license agreement with CPRL in August, said the termination notice period ended on Tuesday, after which the franchisee is not "authorised to use the McDonald's system and its intellectual property".

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McDonalds on August 21 terminated the franchise agreement for the 169 outlets operated by CPRL.

In a statement on Tuesday, McDonald's said that CPRL can not use McDonald's system from Wednesday.

McDonald India further said in its statement that CPRL needs "to stop using the McDonald's names, trademarks, designs, branding, operational and marketing practice and policies, and food recipes and specifications".

Connaught Plaza Restaurant Ltd, the 50:50 joint venture between McDonald's India and its estranged partner Vikram Bakshi, can not use the McDonald's brand name from Wednesday. McDonald's India had asked CPRL not to use its brand within 15 days of the termination notice which gets over on September 6. McDonald's act of terminating the franchise license was a violation of NCLT's order, he added. "We are proceeding with exercising our legal and contractual rights". The Connaught Plaza Restaurant Ltd (CPRL) is a 50:50 joint venture between McDonald's and Bakshi.

McDonald's termination of its franchise agreement with CPRL would mean uncertainty regarding the future of 169 outlets and almost 10,000 employees working in them.

Vikram Bakshi said the closure of stores would have an adverse impact on thousands of lives and businesses. "However, we are unable to accept the submission", said NCLT bench headed by Chairman Justice M M Kumar, as per a report by PTI.

McDonald's India and Bakshi have for always been embroiled in a fight over CPRL's control. Of the 169 stores that are impacted, 43 are already closed for the last two months, on account of non-renewal of eating house licences by local authorities.

The popular fast food chain, which is known for graduating people from vada pao to a range of burgers, has seen its fortunes declining since the past few years over a tussle with Bakshi for the management of CPRL after he was ousted from the post of managing director of the joint venture company in 2013.



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