The long-drawn battle between burger major McDonald’s and its partner for North and East India – Vikram Bakshi led Connaught Plaza Restaurants (CPRL) seems to be taking a new turn.
After being served with a termination notice earlier this year, Bakshi continued to operate outlets under CPRL’s fold. McDonald’s, on Thursday, alleged that quality of food served in these restaurants could not be guaranteed anymore, raising alarm over the safety of consumers.
On Thursday, in an emailed statement, McDonald’s India Private Limited (MIPL) said that since the termination of the franchise agreements, MIPL has not been able to verify if the unauthorised McDonald’s restaurants operated by CPRL in North and East India are complying with applicable McDonald’s standards, including those pertaining to supplies, operations and safety standards and quality required for McDonald’s products and that “these restaurants need to be closed immediately”.
MIPL had terminated the franchise licensing agreement in September that disallowed CPRL to use the McDonald’s brand name, logo and trademarks. In December, CPRL’s supply partner Radhakrishna Foodland stopped the supply of raw materials – forcing it to shut down 84 outlets in the eastern part of the country temporarily. However, on Wednesday, CPRL’s managing director Vikram Bakshi said that the firm is readying itself to re-open the outlets as it has found a strong group of logistics partners.
Hitting back at Bakshi’s move, on Thursday, McDonald’s further said, “Food quality and safety are affected by all facets of the supply chain, from raw material sourcing and production to manufacturing to restaurant handling and preparation. Transportation and storage are critical links in the process. The unknown distribution centre is not approved to supply within the McDonald’s System.”
CPRL's decision to operate the McDonald’s outlets despite being served by a termination notice may attract the court's wrath in the future, according to legal experts. Also, McDonald’s has now made a decision not to continue with Bakshi’s CPRL as a franchise partner in major markets.
In fact, MIPL is now in discussions with a handful of restaurant management companies in the country to replace CPRL. The burger major has said that reaching a final agreement with a new party may take months. However, given the trouble the company is now facing in North India, which is its largest market, it may come out with a decision next month, sources say.