169 Mcdonald’s Outlets are Shutting Down In India – Here’s the Reason

169 Mcdonald’s Outlets are Shutting Down In India

On Monday, The US fast food chain, McDonald has terminated its franchise agreement with Connaught Plaza Restaurants Pvt. Ltd (CPRL), due to alleged breach of franchise agreements, leading 169 Mcdonald’s Outlets to Shut Down In India. Because of the termination, more than 10,000 people are at the stage of losing their job. McDonald’s stated that “default in the payment of royalties by CPRL” is the main reason behind termination.

In India, nearly 430 outlets are operated by McDonald’s through CPRL and Hardcastle Restaurants. The fast food chain is searching for a new partner to replace CPRL. McDonald’s India said in an email, “We understand that this action brings uncertainty for many,” “It will take time to bring the current situation to a final resolution.”

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169 Mcdonald’s Outlets are Shutting Down In India

Something You Must Know About CPRL

The American fast food chain has its presence across the world, serving people in 119 countries. Connaught Plaza Restaurants Pvt. Ltd is a 50 ration 50 joint venture between Vikram Bakshi and McDonald’s India. The 23-year-old CPRL is managing McDonald’s operations in north as well as east India, will not be permitted to use the Mcds logo, trademarks, branding and recipes within 15 days of receiving the notice of termination.

169 Mcdonald’s Outlets are Shutting Down In India

A senior McDonald’s executive said that, “Each McDonald’s outlet employs around 40-60 workers depending on its size”. He added, “This excludes corporate employees and suppliers, including farmers who supply raw produce such as tomatoes, onions, lettuce and ingredients for sauces.”

Since 2013, McDonald’s has been struggling to get rid of Bakshi when he was expelled as the MD of CPRL over alleged misuse of funds. However, in July, Bakshi was restrained the post of CPRL’s MD by the National Company Law Tribunal. In the month of June, nearly 43 McDonald’s stores were shut down as CPRL failed to get relevant health licences for the outlets.

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When contacted about the termination notice, Bakshi said, “The timing of this notice is hugely suspect because it comes on the morning of the first board meeting, scheduled by the administrator (a former judge of the Supreme Court of India) appointed by the Hon’ble NCLT and which the two Foreign Nominee Directors of McDonalds, declined to attend, despite receiving sufficient advance notice.”

Ron Christianson, global head of corporate relations, foundational markets, at McDonald’s Corp. said, “The termination is a result of a breach, a violation of certain essential obligations that were a part of the agreement typically the default of payment of royalties to MIPL for two years. CPRL was notified of the breaches and was provided opportunity to remedy those; it had failed to do so.”

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This is the reason behind Shutting Down 169 Mcdonald’s Outlets In India. If you like reading our page, bookmark it by pressing Ctrl + D and for more updates on the go, stay connected with us only at coolexample.in

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