The world's largest burger chain McDonald's, which in December posted its first-ever profit in India after 22 years of business, is now looking to wrap up its long-drawn dispute with Vikram Bakshi, one of its two partners in the country. Bakshi's Connaught Plaza Restaurants (CPRL) handles the fast-food chain's 165 outlets in the northern and eastern regions through the franchise route. McDonald's outlets in the southern and western regions are run by Amit Jatia-led Westlife Development.
On Monday, the counsels for McDonald's India Pvt Ltd and Bakshi told a two-member National Company Law Appellate Tribunal (NCLAT) bench that they are working towards an out-of-court settlement. "As has been reported, both shareholders are pursuing a settlement and I am sure you can appreciate, details of which cannot be shared at this stage," Bakshi told The Times of India. In fact, citing a senior industry executive in the know, the daily added that the handover process is in progress. "McDonald's will look to renovate and refurbish the outlets and rework the supply chain," the source added.
The bench, headed by Chairperson S J Mukhopadhyay, directed that either of the parties may file an affidavit including the terms of the settlement being arrived at on the next date of hearing, scheduled for May 13.
In 1995, the two partners had formed a 50:50 joint venture, CPRL, to open McDonald's outlets in India for a period of 25 years. But things reportedly started souring in 2008, when the Chicago-headquartered giant tried to buy out Bakshi's 50% stake. Matters further went downhill five years later, when Bakshi was removed as the Managing Director of CPRL. The National Company Law Tribunal (NCLT) subsequently reinstated him and also refrained McDonald's from interfering in the functioning of CPRL besides appointing an administrator to oversee its operations.
Then, in August 2017, McDonald's terminated CPRL's franchise agreement citing non-payment of royalties. As per the termination notice served by the US-based fast food company, these restaurants were barred from using McDonald's brand name, trademark, design, operating and marketing practices and policies, food recipes and specifications after September 5, 2017. But Bakshi had stuck to his guns and continued using the brand and operating the outlets as usual, while battling it out with McDonald's in various legal forums including NCLT, NCLAT and the Delhi High Court.
But recent developments suggest that the curtains may come down on the over five-year-old dispute soon.
(With PTI inputs)
(Edited by Sushmita Choudhury Agarwal)