As the conflict between McDonald’s and Connaught Plaza Restaurants (CPRL) continues, around 80 outlets of the popular fast-food chain have been shut and several others in north India about to face the downed shutters due to the discontinuation of supplies by its logistics partners. CPRL is a 50:50 joint venture between Bakshi and McDonalds’s and around 160 outlets. Alleged non-payment dues by CPRL has created a rush between the company and McDonald’s supply chain partner Radhakrishna Foodland.
“Almost all the outlets in east India have been shut because of the move by logistics partner, and others (in north India) are also under pressure due to the supply crunch,” said Bakshi, adding that a total of over 80 outlets are suffering currently considering the limited stock each outlet has. “We are now having to airlift supplies and more outlets are likely to get affected over the next few days,” he added. “Radhakrishna Foodland has abruptly ended their services and the timing is a suspect because this is the peak season.”
According to the reports, in a letter dated December 20, RadGhakrishna Foodland Pvt Ltd wrote to CPRL, the 50:50 JV between Bakshi and McDonald’s India, saying it is discontinuing the supply chain services due to reduction in volume and uncertainty of the future, among others as also non-payment of certain additional amount. “Our long-standing logistics vendor Radhakrishna Foodland allegedly in collusion with McDonald’s corporation and their wholly owned subsidiary McDonald’s India Pvt Ltd….has decided to hold back stock paid for approximately Rs. 10 crores by us,” Bakshi said in a letter to the landlords and developers of his outlets.
He further wrote: “While the American company and its subsidiary, MIPL, may have with their usual mala fide and malicious actions managed to give CPRL a temporary business setback at the end of the year and during this high sale festive season, yet we have made and are making alternative arrangements and shall be back to serve our customers very soon.”
McDonald’s had terminated its franchise agreement with CPRL in August due to a long-drawn legal battle with Bakshi, which began in 2008 when the fast-food giant wanted to buy out his stake in the company. It had offered $5-7 million for Bakshi’s stake, while Bakshi quoted $100 million after Grant Thornton valued CPRL at $331million.