McDonald’s Outlets

More than 10,000 people could lose their jobs, as MC Donald’s has terminated its license agreement with Connaught Plaza Restaurant Ltd. (CPRL).

The American fast food giant terminated its license with Connaught Plaza Restaurant due to alleged violation of contract terms and payment default.

CPRL, which runs McDonald’s outlets in North and East India, will not be able to use the chain’s name, recipes, operational & marketing practices and policies, food recipes & specifications, brandings, and trademarks.

In June, CPRL had downed shutters of 43 outlets in New Delhi for failing to renew its lapsed licenses.

Managing Director of CPRL, Vikram Bakshi, who owns 50 percent stake in the partnership filed a petition before the National Company Law Tribunal (NCLT) challenging the termination of the agreement.

On Tuesday, NCLT dismissed Bakshi’s plea, and asked him to seek relief from the London Court of Arbitration where the matter is still pending.

Meanwhile, the board of CPRL held a meeting with NCLT-appointed administrator justice, GS Singhvi to decide the future course of action.

A McDonald’s India spokesperson said, “We are looking to take steps to exercise our legal and contractual rights to enforce the termination.”

Mr. Bakshi described McDonald’s decision to terminate agreement as “mindless and ill-advised.” “The decision will cause widespread damage to over 10,000 people (directly or indirectly).” he added.

On 21 September, NCLAT will hear the plea of McDonald’s against the order of the NCLT reinstating Bakshi as the Managing Director of CPRL.

The relations between McDonald’s and Bakshi have been estranged since 2013, when the latter was ousted as CPRL’s MD over alleged misuse of funds.