Restaurant chain McDonald’s face closure of its 169 restaurants on Wednesday in Northern and Eastern regions of India. The move comes into effect after McDonald’s long-standing agreement with Connaught Plaza Restaurants Limited (CPRL) came to an end on September 5, 2017. The US-based fast food giant terminated the contract with Connaught Plaza Restaurants after the Indian company failed to comply with several norms. A senior official from McDonald’s blasted CPRL for violating the agreement obligations, one of them was the non-payment of royalty for 2 years.
CPRL has been further barred to use any of McDonald’s intellectual property, it’s logo, name, design, trademark and anything resembling McDonald’s. As CPRL braces itself for the shutting down of 169 outlets, the future of thousands of employees who worked for the closure-bound McDonald’s now hangs in balance.
With the shutting down of McDonald’s in North and East India, sales of several competing fast food restaurants have significantly gone up. It should be noted that McDonald’s have a total of 300 outlets in India and around 131 of them are in South and West India which is managed by Hardcastle Restaurants Private Limited, led by Smita Jatia.
If reports are to be believed, the decision could affect at least 6,500 direct jobs.
McDonald’s said it was “committed to finding the right developmental licensee partner for North & East India”.
Ron Christianson, company spokesperson, while speaking to ET, said, “We are committed to finding a new partner; it is very early stages and we will start the process soon,” he added, adding: “There are no concrete conversations as yet. It could take several months at the least and we cannot speculate at this stage.”
In another statement, McDonald’s said, “CPRL is required to cease using the McDonald’s System and its associated intellectual property in relation to these restaurants within 15 days of the termination notice.”
“It will take time to bring the current situation to a final resolution. However, we remain fully committed to the opportunity in North and East of India and are already looking at the necessary steps to rebuild the brand,” the statement further said.