McDonald’s Turns Up the Heat on Indian Franchise
McDonald’s Corp is in the middle of an unusual situation in India. Even after the franchise has been discontinued in North and East India following a spat with the Connaught Plaza Restaurants Pvt. Ltd. managing director Vikram Bakshi, the McDonald’s restaurants have not stopped selling food under the brand.
Connaught Plaza managed 150 restaurants of the brand, which made up 40 per cent of its Indian outlets. In June, 43 outlets were shut down. However, the company’s popular food is still being sold by the franchise, using the brand name and recipes, the Wall Street Journal reported. “I cannot allow a large organization, this [multinational] monster, whatever you want to call it, to truly belittle our contributions,” Bakshi was quoted as saying by the publication.
McDonald’s believes that Bakshi broke agreements on financial management, internal controls, royalty payment, etc. Bakshi denies most of the accusations.
“We’ll continue to take steps to exercise our legal and contractual rights and enforce the termination,” Ron Christianson, McDonald’s spokesman in Hong Kong, was quoted ass saying in the report. “It will take time to bring the current situation to a final resolution.”
While McDonald’s suppliers were told that Connaught Plaza outlets no longer fall under the wings of the company, Bakshi is said to have been reaching out to them to keep them on board. However, Connaught Plaza outlets now see food offerings falling off the menu. Items like McFlurry desserts, Maharaja Mac, and Pizza McPuffs are unavailable as ingredients like jalapeños, tomatoes and milk went missing. Outlets are also out of McDonald’s cups. Bakshi said he has been trying to source ingredients from another supplier.
Amitabha Ray, the managing director at Schreiber Dynamix Dairies Ltd., told the publication that his company stopped selling dairy products to Bakshi’s restaurants after being contacted by McDonald’s.
McDonald’s has a sizeable customer base in Delhi, with customers now rushing in to eat at the outlet while they can. As for the employees, they are in the dark. They are now on shorter shifts for less pay, the Quint reported.