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Closure of 43 McDonald's in Delhi will not impact brand: US licence agency

Closure to have an impact on Delhi as number of McDonald's store has gone down: Jatia

Mcdonald's Shuts Down

Press Trust of India  |  New Delhi 

McDonald, soft drink, beverage, McD
Photo: Shutterstock

Closure of 43 McDonald's outlets in Delhi is a local issue and it has not hurt the brand in other parts of India, according to Hardcastle Restaurants, the licensee of the US fast food chain for West and South India.

Terming the closure of stores as "a local issue in Delhi" Hardcastle Restaurants Vice Chairman Amit Jatia said that the impact is just a blip in short term.

On being asked whether the brand McDonald's has got a hit because of this, Jatia told PTI:"I do not think so. From West and South point of view, we are firing from all cylinders and things are good for us."

"The customers do not care as who owns the restaurants. The customer is visiting a McDonald's from McDonald's and not necessarily knowing as who they are (franchise)," he added.

This would "obviously going" to have an impact on Delhi as the number of McDonald's store has gone down, Jatia said.

"So obviously, they would use other brand instead," he added.

According to Jatia: "We (McDonald's) have 420 restaurants in India and is opening 30 new restaurants a year. From a brand point of view to cover 43 restaurants is just a matter of year. I my view, its a blip in the short term".

Last month, McDonald's had decided to shut down 43 of the total 55 outlets in Delhi due to failure to renew eating house licences.

As the dispute between Vikram Bakshi, an equal joint venture partner of McDonald's India Pvt Ltd (MIPL) in Connaught Plaza Restaurants Ltd (CPRL) that is the licensee for North and East India regions is over, the US fast food chain must have plans to bring their brand on track, Jatia said.

"As they resolve it, I am sure McDonald's has plans to do what they need to do to get the brand right again in North and East," he added.

However, on being asked whether he would go for Bakshi's stake in CRPL, if he is given a chance, he declined to comment.

"When the time comes, its for us to discuss that. At this point of time, we are hoping that McDoanld's and CPRL quickly resolved their issues so that we can move forward. Its not my place to comment on that," he added.

Hardcastle Restaurants has plans to invest Rs 700 crore in next 3-5 years to double the outlets of the fast food chain to 500 in the two regions from the present 260.

"We would invest around Rs 700 crore by doubling our restaurants. The Idea is to double the base of restaurants in next 3 to five years but also along with that is to re-image and McCafe," Jatia said.

In last three years, Hardcastle Restaurants has opened over 100 restaurants with an investment of around Rs 300 crore, he added.

Besides, the company is also adding McCafe stores in its existing McDonald's on store-in-a-store format and changing the look of its restaurants to sync with the future and the new generation.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Thu, July 13 2017. 00:24 IST