As McDonald’s vs Vikram Bakshi row plays out, rivals just loving the spectacle, laugh all the way to the bank

Published: September 8, 2017 5:41 AM

Even as the fight between Vikram Bakshi and McDonald's plays out, leaving the fate of the outlets uncertain in the northern and eastern parts of the country, one thing is certain — the iconic fast food brand has lost significant revenues and market share in Delhi during July compared with the preceding month while other QSRs gained at its cost during the period.

McDonalds, McDonalds india, McDonalds controversy, McDonalds store closed, McDonalds vs vikarm bakshi, vikram bakshi, who is vikram bakshi, Connaught Plaza RestaurantUp to 43 of the 55 outlets run by CPRL — the 50:50 JV between Bakshi and McDonald’s India — in Delhi downed shutters in June when, because of the impasse between the partners, the mandatory licences could not be renewed. (PTI)

Moinak Mitra

Even as the fight between Vikram Bakshi and McDonald’s plays out, leaving the fate of the outlets uncertain in the northern and eastern parts of the country, one thing is certain — the iconic fast food brand has lost significant revenues and market share in Delhi during July compared with the preceding month while other quick service restaurants (QSRs) gained at its cost during the period.

Up to 43 of the 55 outlets run by Connaught Plaza Restaurant (CPRL) — the 50:50 JV between Bakshi and McDonald’s India — in Delhi downed shutters in June when, because of the impasse between the partners, the mandatory licences could not be renewed.

According to a recent Kantar IMRB-Crownit report, which has used a sample size of 2,500 users with an average spend of under Rs 600 in Delhi, Burger King and KFC’s revenue in the overall QSR market grew by 2% each in July over that of June. Subway showed strong growth of as much as 5%. However, “McDonald’s overall revenue in the QSR space declined from 9% in June to just 3% in July”, Puneet Avasthi, senior executive director, Kantar IMRB, told FE.

During the same period, McDonald’s market share in the QSR space shrank by as much as 71% (it was 9.2% in June which declined to 2.7% in July). Subway grew the most from 3.9% to 5.2%, while Burger King grew its share from 4.8% to 5.1%, KFC surged from 3.3% to 4%, among a raft of other QSRs (see graphic).

Meanwhile, uncertainty continues to loom over 169 McDonald’s restaurants run by CPRL in the north and east of the country as Bakshi on Thursday failed to secure any interim relief from the National Company Law Appellate Tribunal on his plea seeking a stay on the termination of franchise agreement by McDonald’s. The NCLAT said that it would hear the matter on September 21.

Whether the outlets will continue to function or not since the 15-day notice served on CPRL by McDonald’s terminating the franchise agreement ended on Tuesday evening, Bakshi said that CPRL’s administrator (justice GS Singhvi) shall be requested to call for a board meeting at the earliest so as to discuss the matter. “Till a discussion is taken by the board of CPRL, it is business as usual,” Bakshi said. On Wednesday the CPRL board under Singhvi had decided to wait till Thursday for the matter to be taken up by the NCLAT.

Meanwhile, a McDonald’s India spokesperson continued its earlier stance: “We are looking to take steps to exercise our legal and contractual rights to enforce the termination.”

The spokesperson had on Tuesday said that CPRL was no longer authorised to use the McDonald’s system and its intellectual property after the expiry of the termination notice.

(With inputs from Surya Sarathi Ray)

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