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43 of 55 McDonald’s outlets in Delhi closed

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Don’t be surprised if you find the McDonald’s outlet you frequent in Delhi, shut down on Thursday.

As many as 43 out of the existing 55 McDonald’s outlets in Delhi are shutting down, and it’s happening as soon as today, that is Thursday.

In an unprecedented move, the infighting between Connaught Plaza Restaurants (CPRL), the 50:50 local joint venture between Vikram Bakshi and the US-headquartered McDonald’s that operates the fast food chain in north and east India, and the global burger giant took an ugly turn with the CPRL board deciding to shut down 43 out of 55 restaurants in Delhi from Thursday.

“The eating house licenses of a number of McDonald’s restaurants in Delhi have expired. The board of CPRL is working to obtain the required licenses. Pending this, CPRL is temporarily suspending the operations of the affected restaurants. While there are on-going legal disputes, suspending operations of the restaurants is a collective decision of CPRL’s board of directors,” said McDonald’s India in a statement.

Over reports saying the shutdown will result in a loss of 1,700 jobs, MIPL said, “We understand that CPRL is retaining the employees of affected restaurants and will pay them their salary during the period of suspension.”

Vikram Bakshi, who was ousted as the MD of CPRL in 2013, has been involved in a bitter legal fight with McDonald’s, and has taken the world’s largest food chain to the Company Law Board, which is yet to announce its verdict. Meanwhile, McDonald’s has been pursuing arbitration against Bakshi in the London Court of International Arbitration.

According to data available at the Registrar of Companies, Ministry of Corporate Affairs, CPRL’s revenue growth fell to six per cent in 2014-15 compared 29 per cent in 2010-11 as investments came to a standstill. The slide being pronounced in 2014-15, when CPRL posted Rs. 645 crore revenue compared to Rs. 609 crore in the previous year.

In 2013-14, too, revenue growth halved to eight per cent from 16 per cent in 2012-13. In 2012-13, CPRL generated Rs. 562 crore in revenues and in the previous year it stood at Rs. 490 crore. Data has been sourced from the industry.

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