The four-year-long quarrel between McDonald's and Vikram Bakshi is about to hit a crescendo as the National Company Law Appellate Tribunal (NCLAT) is expected to settle matters later today. The decision will establish whether Connaught Plaza Restaurants Limited (CPRL) can continue to run 169 restaurants under the McDonald's brand, or not. CPRL is the 23-year-old 50:50 joint venture between the US-based fast food giant and Bakshi, which operated McDonald's chain of restaurants in North and East India.
Meanwhile, names of prospective replacements for Bakshi as McDonald's future partner have already begun doing the rounds, in case things do not go in his favour. While NCLT resolves the tussle, which will affect workforce numbering in thousands, here's a lowdown on the longstanding fight between McDonald's and Bakshi.
McDonald's-Bakshi spat: Story so far
It all began when Vikram Bakshi was sacked as Managing Director of CPRL in August 2013. McDonald's accused its partner of financial bungling and misconduct. He regained the upper hand in the scuffle when he was reinstated on his earlier position by the NCLT one month ago.
When things were finally going in Bakshi's favour, McDonald's shook the boat again, terminating franchise agreement for 169 restaurants in North and East India under CPRL. As per the termination notice served by the US-based fast food company, these restaurants cannot use McDonald's brand name, trademark, design, operating and marketing practices and policies, food recipes and specifications after September 5.
Bakshi remained adamant, stating that he will continue to use the McDonald's brand for the restaurants despite the franchise agreement being terminated. The matter reached NCLT, and a decision is set to be taken today. Even though the final word is pending, many McDonald's restaurants did not open for business yesterday over uncertainity.
If the restaurants are closed down
McDonald's has terminated franchise agreement for 169 restaurants across North and East India. These establishments employ around 6,500 employees whose future remains uncertain before NCLAT decision, which is set to come later today.
If NCLAT decides to rule in favour of McDonald's, CPRL will no longer remain the master franchisee of the restaurant chain in North and East India. It will remain to be seen whether the same workforce will be hired once again when and if McDonald's resume operations in these parts of the country.
Prospective future partners for McDonald's
Amit Jatia, McDonald's partner in South and West India, is coming across as the most probable name to become the next master franchisee for the fast food firm in the rest of the country. Jatia's Westlife Development saw an increase in its share recently, with investors banking on the firm becoming the country-wide business partner with McDonald's.