Fast food chain McDonald’s India on Monday terminated its agreement with Connaught Plaza Restaurants Pvt Ltd for 169 restaurants in North and East India, reported Mint. As a result, CPRL will have to stop using any intellectual property of McDonald’s at the 169 outlets within 15 days of the notice.
In its statement, McDonald’s said it would find a new licensee partner for its outlets in the two regions. McDonald’s move could result in the loss of jobs for thousands of its employees, and hamper contracts of its suppliers, The Economic Times reported.
The development comes two months after CPRL shut 43 out of 55 McDonald’s outlets in Delhi, as local authorities did not renew their licenses. On Monday, McDonald’s said, “We have been compelled to take this step because CPRL has materially breached the terms of the respective franchise agreements relating to the affected restaurants, and has failed to remedy the breaches, despite being provided with an opportunity to do so in accordance with the agreements.”
The joint venture between McDonald’s and CRPL first hit a roadblock when CRPL Managing Director Vikram Bakshi was ousted in 2013 after McDonald’s voted against his re-election. Bakshi challenged his removal in the National Company Law Tribunal, and was reinstated as the managing director in July.