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‘Temporary’ trouble for McDonald’s

‘Temporary’ trouble for McDonald’s

Over 40 of around 55 McDonald’s outlets in the Capital “temporarily shut down” starting Thursday after their eating house licences expired.

Outlets of the fast food giant in north and east India are operated by the Connaught Plaza Restaurants (CPRL), which is a 50:50 venture between Vikram Bakshi and the American firm.

Licences expired

“The Eating House Licences of a number of McDonald’s restaurants in Delhi have expired. The CPRL Board, which is McDonald’s licensee in north and east India, is working to obtain the required licences,” said Barry Sum, McDonald’s India spokesperson in an email.

Mr. Sum added that the CPRL had temporarily suspended operations at 41 affected restaurants.

Mr. Bakshi told The Hindu in an SMS that “though unfortunate, reports are correct that around 40 McDonald’s restaurants have temporarily suspended operations in the city of Delhi from today morning [Thursday]”.

Mr. Bakshi and McDonald’s have been at loggerheads for over three years over the control of the CPRL. The food chain, in fact, is pursuing arbitration proceedings at the London Court of International Arbitration.

Ongoing legal tussle

The CPRL Board includes Mr. Bakshi, his wife, and two McDonald’s representatives.

“While there are on-going legal disputes, suspending the operations of restaurants is a collective decision of the CPRL’s Board of Directors,” Mr. Sum said.

‘India is key market’

He added, “It’s our understanding that the CPRL has notified key stakeholders including employees, landlords and suppliers before the temporary suspension started on 28 June.”

The McDonald’s spokesperson also said that India continues to be an important market for the US firm, which is “committed” to working with the CPRL to resolve the issue as soon as possible.

Both Mr. Bakshi and McDonald’s, however, refuted reports of employees losing jobs. “Comments about employees losing jobs are erroneous. We understand that the CPRL is retaining employees of affected restaurants and will pay them their salary during the period of suspension,” McDonald’s said.

No job cuts

Mr. Bakshi, meanwhile, added that since this was a temporary shutdown, all employees working at the affected restaurants would be retained.

 

Source: The Hindu

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