When it come to food Indian people love to visit McDonald’s and the capital city of India Delhi is famous for its 53 McDonald’s outlet. Its a bad news for burger and pizza lovers. As the 43 of the capital’s 55 McDonald’s will remain close from today onward because their licenses have expired, according to the Press Trust of India.
As per the Economic Times”The decision to close down the outlets was taken during a board meeting via Skype on Wednesday morning”. As several newspapers also reported that the dispute between the Indian franchisee that runs the fast food chain in North India – a company named Connaught Plaza Restaurants Pvt Ltd – and McDonald’s has caused the closer of McDonald’s.
Due to lack of investment and falling revenues has caused a legal battle over ownership of the fast-food chain.
The main issue is regarding the maintenance of quality and hygiene at the stores had been going on since 2013. When asked, McDonald’s said, “the eating house licenses of a number of McDonald’s restaurants in Delhi have expired”.
As per IE report, (CPRL) Board deciding to shut down 43 out of 55 McDonald’s outlets in Delhi from Thursday (29 June, 2017). The closure is a result of a long drawn legal battle between Vikram Bakshi and McDonald’s, and the case reached a logical conclusion with the Connaught Plaza Restaurants Ltd.
McDonald’s India and Vikram Bakshi are 50:50 partners in Connaught Plaza Restaurants. As Bakshi was declined by McDonald’s India to be renominated in the post for the firm’s Managing Director, when his term expired on July 17, 2013.
Ever since then, the two sides have been fighting it out. Bakshi had challenged his removal from the firm, in the Company Law Board (CLB), Delhi. He even accused the burger chain of mismanagement and oppression under Sections 397 to 402 of the Companies Act, 1956. Bakshi had accused Hardcastle Restaurants as well, which is a company that runs the operations in the west and southern part of the country, of influencing the US fast food chain “to take oppressive steps” against him.
Around 1,700 employees will lose their jobs because of this dispute which began a while ago. Where as “The Board of CPRL (the joint-venture) is working to obtain the required licenses. Pending this, CPRL is temporarily suspending the operations of the affected restaurants,” McDonald’s India Pvt Ltd (MIPL) spokesperson Barry Sum said.
He also said that “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.