The estranged joint venture partner of McDonald’s India has warned that the fast food giant’s outlets in North India may be shut because of a supply crunch, Mint reported on Tuesday. Connaught Plaza Restaurants Pvt Ltd on Monday said that almost all McDonald’s outlets in East India have already been closed.
“Almost all the outlets in East India have been shut because of the move by logistics partner, and others [in North India] are also under pressure due to supply crunch,” Vikram Bakshi, the managing director of Connaught Plaza Restaurants, told PTI.
Radhakrishna Foodland, the company that managed the logistics, informed the company on December 20 that it was discontinuing its supply chain services. Bakshi said this was a malicious act and that his company was not informed about this in advance. “Radhakrishna Foodland has even decided to hold back stock for approximately Rs 10 crore paid by us,” he said.
The company said it had incurred a loss of Rs 1 crore because of the shutdowns and expected it to increase the longer the stores remained closed during the festive season.
The move by the suppliers comes in the backdrop of a legal tussle between Bakshi and McDonald’s. On August 21, McDonald’s India had cancelled its license agreement with Connaught Plaza Restaurant Limited. The fast-food company said it had been forced to end the partnership as CPRL had “materially breached terms of the respective franchise agreements relating to the affected restaurants, and failed to remedy the breaches”.
The joint venture between McDonald’s and CRPL first hit a roadblock when Bakshi was ousted in 2013 after McDonald’s voted against his re-election. Bakshi challenged his removal in the tribunal and was reinstated as managing director in July.