Thursday brought some really bad news for every burger lover as 43 of a total 55 outlets of McDonald’s were closed in the national capital Delhi. The reason behind this move goes back as many as 21 years and has its roots in the initial agreement. It transpires that this US-based fast food chain failed to renew its eating house licences, which is managed by the North and East India licensee Connaught Plaza Restaurants Pvt Ltd (CPRL). This led it to close a certain number of outlets on June 29. 21 years ago when the first outlet of McDonald’s in India opened, in 1996, the global food chain started operating in the country under the management of CPRL. It is a 50:50 joint venture between entrepreneur Vikram Bakshi and McDonald’s that handles all of the outlets of North and East India, according to The Indian Express. Its board of directors consists of Bakshi, his wife and two representatives of McDonald’s.
Things were running well until 2013 when in August, McDonald’s announced his removal from the position in CPRL. Bakshi was its managing director. A month after the decision of the food chain, Bakshi filed a petition with the Company Law Board (CLB) challenging this decision on September 9. Amid the CLB proceeding into the matter, McDonald’s approached the London Court of International Arbitration (LCIA) to resolve the dispute. Informing about the move, McDonald’s India said as per their joint venture agreement, any dispute between them had to be referred to LCIA for arbitration. However, it was not taken well by Bakshi and he challenged the step of the food chain in the High Court of Delhi.
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After three years, the Delhi HC permitted McDonald’s to pursue arbitration at LCIA. Bakshi then moved the Supreme Court on the issue. But his appeal was dismissed by the SC. The apex court stated that it was upon the London arbitrator to examine if the claims of the global food chain were tenable or not. Both the sides are still awaiting LCIA’s decision over the matter, The Indian Express report said.
The stores of McDonald in South and West India are handled by Hardcastle Restaurants Pvt Ltd. It is owned by entrepreneur Amit Jatia and pays a franchise fee and royalty to McDonald’s for using its brand name.