McDonald's may appoint new partner for north, east India after Bakshi row

In August, McDonald's terminated franchise agreement for 169 out of its 430 fast food outlets operated by Bakshi

After months of intense battle with its Indian joint venture partner Vikram Bakshi, fast food giant Mcdonald's India may soon appoint a licensee partner for the north and east India region.

In August this year, McDonald's had terminated franchise agreement for 169 out of its 430 fast food outlets operated by Bakshi-led Connaught Plaza Restaurant Ltd (CPRL) in north and east India, alleging breach of contract terms and payment default by the operator.

Post franchise agreement termination, both the sides are locked in a protracted legal battle at various courts, including National Company Law Tribunal (NCLT) and the Delhi high court.

Bakshi, who has challenged the termination, continues to operate the outlets saying he will run them until there is a amicable solution by the courts or an acceptable offer by McDonald's to buyout of his stake in CPRL.

CPRL is a 50:50 joint venture between McDonald's India Pvt Ltd (MIPL) and Bakshi.

"We are actively progressing towards finding the right Developmental Licensee partner for the region so that we can grow the business and rebuild the McDonald's brand," a McDonald's India spokesperson told PTI.

Sources in the know said the US-based food chain has finalised the criteria for selection of licensee partner and would come out with a name probably in a couple of months.

It was widely speculated that Hardcastle Restaurants, which runs McDonald's stores in the west and south, is the front runner for the job. However, there are other players who are keen to grab the license in the region, considering the high profit margins at which McDonald's outlets operate.

The spokesperson, however, declined to comment on the interested parties.

Commenting on the ongoing conflict that grabbed headlines post termination, he said: "These restaurants (McDonald's outlets being run by Bakshi) need to be closed immediately. As such, we are taking steps to exercise our contractual and legal rights".

As per the termination notice, CPRL was ceased to use McDonalds's name, system, trademark, designs and its associated intellectual property, among others.

The company said it is not aware of the food and safety standards as the outlets being run are unauthorised.

"Since the termination, MIPL has not been able to verify if these unauthorised McDonald's restaurants are following operational procedures and controls, supplies and safety standards," the spokesperson said.