McDonald's buys out India partner; to reopen outlets in 2 weeks
10 May 2019
1
US fast food chain McDonald's Indian arm has bought out the shares owned by partner Vikram Bakshi in their joint venture, Connaught Plaza Restaurants Ltd, thereby settling a long-drawn tussle over business rights.
McDonald's Corp's Indian arm has acquired full ownership in Connaught Plaza Restaurants Ltd, the company said in a statement.
"Today's ownership transfer marks an important and positive milestone for McDonald's in North and East India," McDonald's said.
McDonalds was involved in a long-drawn legal battle with partner Bakshi, claiming his company, which operated outlets of the chain in north and east India, breached the terms of their franchise agreements.
The company has closed its restaurants in North and East India to conduct a "comprehensive assessment of operational protocols and employee training," the statement said, adding that the restaurants will be opened over the next two weeks.
The company also appointed Robert Hunghanfoo as head of Connaught Plaza.
In August 2017, the Indian unit of McDonald's ended its pact with Connaught Plaza Restaurants Pvt, which ran 169 outlets in the northern and eastern India, saying the partner violated "certain essential obligations" of the agreement, including the payment of royalties.
Since then, several outlets were briefly closed down and the move had affected operations of the fast-food chain as some suppliers snapped ties. But despite warnings from the US-based company, Connaught Plaza Restaurants kept most of the outlets open.
