The international food giant, McDonald’s has planned to shut down 169 stores in India. This will result in 10000 people losing their jobs. McD has outlets in around 119 countries all over the world. On Monday, it was reported that they are going to terminate franchise of certain stores in India.
The alleged breach of franchise agreements is the reason behind this behind this decision. The franchise with Connaught Plaza Restaurant (CPRL) is targeted for termination. CPRL is a 50-50 joint venture between McDonald’s India and Vikram Bakshi for 23 years.
CPRL runs its operations in northern and eastern India. After the franchise termination, CPRL will not be able to use McD’s logo, trademarks, recipes and other branding elements. Everything should be stopped within 15 days of receiving the termination notice.
Depending on the store size, there are 40- 60 workers, on average in a McDonald’s outlet. This is just the in- store employee count. A senior executive of this firm said, “This excludes corporate employees and suppliers, including farmers who supply raw produce such as tomatoes, onions, lettuce, and ingredients for sauces.”
There are 430 outlets in India through CPRL and Hardcastle Restaurants. The latter cover the west and south zone. McDonald’s is on a look out for a partner to replace CPRL. The food giant also stated that dissolving the current scenario and bringing in the new idea is definitely a long term process.
Sources state that the MD of CPRL had misused the funds and there was a tiff with him from 2013. 43 stores were closed as it did not adhere to the health norms. McDonald had to take its stand to overcome such issues and came to a conclusion to replace its partnership with CPRL.
The dates for franchise termination and other related details still remain unveiled. Once they are out, we will get a clear picture of CPRL’s plight.