On Thursday, May 9, McDonalds bought Vikram Bakshis 50% stake in its local unit in Delhi, Connaught Plaza Restaurants Limited (CPRL). In an out-of-court settlement, McDonalds agreed to buy out Bakshi, and the two parties have also withdrawn all arbitration lawsuits against each other.
After buying Bakshis half, McDonalds India and its parent McDonalds Global Markets Llc is now sole owner of CPRL, ending a six-year-long dispute.
With the transfer of ownership and management today, Mr. and Mrs. Bakshi end their association with CPRL and McDonalds. McDonalds acknowledges the significant work and contribution of Mr. Bakshi in establishing McDonalds restaurants in North and East India, said McDonalds in a statement.
Robert Hunghanfoo has been appointed as Head of CPRL.
Hunghanfood said, Accomplishing a mutually agreed settlement in this matter means that our customers can now look forward to a reinvigorated, consistent, and uniquely McDonalds experience when they visit us.
The court has asked McDonalds and Bakhi for an official affidavit detailing the terms of their settlement by May 13.
McDonalds in India
Bakshi opened the first McDonalds outlet in India in the 1995. He was responsible for the chains expansion to 160 outlets across the country as a 50% partner in CPRL.
However, in 2013, Bakshis partnership with the company came under stress after McDonalds voted to have him removed as CPRLs managing director.
That same year, Bakshi then moved the National Company Law Tribunal (NCLT) against McDonalds, alleging mismanagement and oppression. McDonalds also brought a suit against Bakshi in Londons Court of International Arbitration.
In 2017, the NCLT reinstated Bakshi as CPRLs managing direction, leading McDonalds to end its franchise agreement with Bakshi later that year. McDonalds said Bakshi had not paid his royalties and asked suppliers to stop selling to CPRL.
Finally, McDonalds bought out Bakshi on Thursday, sending the six-year-long dispute.
Next steps for McDonalds
In the coming weeks, McDonalds India is going to take stock of its 160 outlets in North and East India, reports Mint. This means those outlets will be closed May 6 onwards.
Although there is no immediate clarity about employees jobs in the interim, McDonalds said there will be no job losses in the near future, despite a change in ownership.
McDonalds India said, Existing managers and crew will continue to be employed during this temporary closure and will be actively involved in activities to re-open the restaurants.
The company is currently looking for new partners in India. McDonalds is looking to expand operations in India with the right development licensee for the region.
The Economic Times reported that either the RP-Sanjiv Goenka Group or Moon Beverages, Coca-Colas largest bottling partner, might become McDonalds new partner in CPRL.
There are also rumours that Amit Jatias Hardcastle Restaurants that manages McDonalds India in the south and west might takeover the north and east, as well.
McDonalds is also working on transferring the ownership and management to ensure smooth continuity of operations.
Rhea Arora is a Staff Writer at Qrius