McDonald's shuts most outlets in Delhi; Bakshi says back as MD of CPRL

Fast food chain McDonald's today kept some of its stores in Delhi open while closing most of its outlets in the city, following the termination of the franchise agreement with Connaught Plaza Restaurants Ltd (CPRL).

The American burger giant runs 169 outlets in the capital under a franchisee agreement with Vikram Bakshi-owned CPRL as a 50:50 joint venture.

McDonald's had given a 15-day time for CPRL and Vikram Bakshi to stop using its brand name, trademarks, designs, branding, operational and marketing practice and policies, and food recipes and specifications. The deadline ended on Tuesday.

Bakshi, in turn, moved the National Company Law Appellate Tribunal (NCLAT), which, however, offered no immediate relief to the beleaguered Vikram Bakshi on his plea seeking a stay on the termination of the franchise agreement by McDonald's

Reports said almost all of the McDonald's fast food restaurants were shut in Connaught Place barring one which was still open and doing business. Similarly another outlet in South-extension and the one at the airport were also open.

McDonald's has closed as many as 43 of its outlets in the capital since June, amidst the raging royalty dispute between Bakshi and the US fast-food chain.

Meanwhile, during the day the board of CPRL met with NCLT-appointed administrator Justice G S Singhvi to decide the future course of action. "The appeal before NCLAT is to be heard tomorrow. The administrator on the board of CPRL in the board meeting today has asked both sides to await NCLAT's decision tomorrow,'' Bakshi said.

McDonald's India said it is looking to take steps to exercise our legal and contractual rights to enforce the termination.

According to the American burger chain, CPRL is no longer authorised to use the McDonald's system and its intellectual property after the expiry of the termination notice because it has not met certain essential obligations that were a part of the agreement.

"These include the default of payment of royalties to McDonald's for two years. CPRL was notified of the breaches and was provided an opportunity to remedy those but it had failed to do so," the US food chain claims.

McDonald's said it is looking for a new partner to run to replace Bakshi for operating its business in north and east India.

Meanwhile, Vikram Bakshi has claimed that he has been elected again as managing director of CPRL by Justice GS Singhvi. "Whilst the NCLT had restored my position as MD from August 6 2013, in the board meeting today I have been elected as MD again for further period,'' Bakshi said.