McDonald's says there will be no job losses, work on permits underway

Franchise was forced to close down 43 of its 55 outlets in the Delhi-NCR region

Fast food major McDonald's said on Friday that the latest row over the expiry of the ‘eating house licences’ would not lead to job losses. The statement comes a day after news about the franchise shutting nearly 80 per cent of its stores across Delhi-NCR starting surfaced on Thursday.

“We understand that Connaught Plaza Restaurants Pvt Ltd (CPRL) is retaining the employees of affected restaurants and will pay them their salary during the period of suspension,”  McDonald’s India Private Ltd (MIPL) spokesperson Barry Sum told Economic Times.

CPRL, which runs the McDonald's franchise for North and East India, has been forced to close down 43 of its 55 outlets in the region as it failed to secure regulatory health clearances to keep the business rolling.

On Friday, the company, however, said that it is working to obtain the permits back. It added that McDonald's would ensure that all its outlets were fully compliant and followed prescribed standards.
 

The shutdown of outlets comes at a time when the long-drawn battle over the ownership of CPRL between its founder Vikram Bakshi and McDonald's India has dislodged the company from the growth track.

CPRL is a 50:50 joint venture and is currently operated by four board members — Vikram Bakshi, his wife, and two representatives of McDonald's.

Bakshi had dragged McDonald's to court in 2013 after the multinational company announced its Indian partner would cease to be the managing director of the equally owned joint venture. The conflict seems to have taken a toll on the day-to-day operations of the franchise that has seen a decline in the opening of new stores.

From 27 new stores opened in 2012, the number whittled down to three in 2015. In between, CRPL opened 13 new stores in 2013 and nine stores in 2014, sources in the know said.