Industry

McDonald’s estranged partner reopens closed 16 of 84 closed outlets

Golden arches of McDonalds, in Omaha.

Golden arches of McDonalds, in Omaha.   | Photo Credit: AP

CPRL, the 50:50 joint venture franchise with McDonald’s, runs 169 outlets in North and East India even after the food chain terminated the agreement over management issues.

McDonald’s estranged partner Vikram Bakshi on Thursday said 16 out of 84 closed outlets in North and East India have been reopened after a new logistics firm was roped in even as the fast food major alleged lapses in food quality and safety level by “all facets of the supply chain”.

The 84 outlets had to close on Monday after the logistics partner of the Bakshi-led Connaught Plaza Restaurants Ltd. (CPRL), Radhakrishna Foodland, discontinued its supply services, alleging reduction in volume and non-payment of certain dues, among others.

Mr. Bakshi, however, has denied the charges, saying Radhakrishna Foodland, in collusion with McDonald’s India, is trying to hurt the business and there in no regular payment default.

CPRL, the 50:50 joint venture franchise with McDonald’s, runs 169 outlets in North and East India even after the food chain in August terminated the agreement over management issues, among others. It says the termination is illegal and the outlets will run till the courts decide in the matter or there is an amicable solution with McDonald’s India.

“The new logistics partner is capable enough of the supply to the restaurants that are affected due to raw material crunch and about 16 outlets have re-opened today,” Mr. Bakshi told PTI.

“CPRL team is working diligently to have all our outlets re-opened the soonest possible,” he said, hinting that in about a week, all the closed outlets will start operating in full flow.

McDonald’s India flags safety concerns

McDonald’s India, however, said the unknown distribution centre is not approved by it and post termination of franchise pact with CPRL, it has not been able to verify if the outlets are complying with applicable McDonald’s food safety, supply and operations standards.

“Food quality and safety are affected by all facets of the supply chain, from raw material sourcing and production to manufacturing to restaurant handling and preparation,” a McDonald’s India spokesperson said.

Battle at various courts

Both the parties are fighting the battle at various courts, including the National Company Law Tribunal (NCLT) and the Delhi High Court as also the London Court of International Arbitration (LCIA).

The tussle started after Mr. Bakshi was ousted as the MD of CPRL in 2013, following which he approached the NCLT, which reinstated him to his position. McDonald’s has challenged the same in the National Company Law Appellate Tribunal (NCLAT).

The LCIA has asked Mr. Bakshi to sell his stake in CPRL to McDonald’s, which is pending at the Delhi High Court.

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Printable version | May 30, 2020 7:58:24 AM | https://www.thehindu.com/business/Industry/cprl-opens-closed-outlets-mcdonalds-flags-food-safety-flaws/article22326509.ece

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