Business

McDonald’s buys out its partner Vikram Bakshi’s 50 percent stake in CPRL, will temporarily shut 165 outlets

McDonald’s buys out its partner Vikram Bakshi’s 50 percent stake in CPRL, will temporarily shut 165 outlets: US famous fast-food chain McDonald’s has recently decided to close 165 of its quick-service restaurants (QSRs) in north as well as east India for  short notice after it declared an out-of-court settlement with its alienated India partner Vikram Bakshi, finishing its nearly six years of spiteful legal encounters.

According to the part of the deal, the US-based company has bought out Vikram Bakshi’s 50 per cent share in Connaught Plaza Restaurants Pvt Ltd (CPRL) that runs and controls McDonald’s outlets in northern as well as eastern India.

On the other hand, the company, did not disclose the monetary details of the transaction. But as per to the buzz in the market is said that the deal was locked at around Rs 1,200 crore but it is still unclear and these are just the guesses.

“With the transfer of ownership and management today, Mr and Mrs Bakshi end their association with CPRL and McDonald’s,” McDonald’s said in a statement. CPRL is now wholly owned by McDonald’s India Private Limited (MIPL) and its affiliate, McDonald’s Global Markets LLC (MGM), it said.

On Monday, McDonald’s and Vikram Bakshi had told a two-member National Company Law Appellate Tribunal (NCLAT) bench which was headed by SJ Mukhopadhyay, that they were functioning in the direction of an out-of-court settlement.

Vikram Bakshi is allegedly in discussion with McDonald’s competing burger chain Wendy’s for franchise rights, as per to the new reports, quoting unnamed sources. The publication cited the 64-year-old tycoon as saying, “I have yet to take any decision about my future.”

Wendy’s runs more than 6,600 restaurants around the world. At the present, it operates less than 10 QSRs in India and has delayed strategies of inaugural up to 50 outlets as scheduled previously. According to the report, it mentioned if Bakshi forms a partnership with Wendy’s he would bring his huge knowledge and experience and it will then help Wendy’s to build up its spot in Asia’s third-largest economy.

The company also clarified in its statement, “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 McDonald’s QSRs is going to reopen in just a few weeks. “Our top priority is to deliver the highest quality restaurant experience to our customers. We will be working around the clock during this process and anticipate our restaurants will start to progressively open over the next two weeks or so. While we are confident this will result in the best possible experience for our customers, we sincerely regret any inconvenience the temporary restaurant closures may cause,” Robert Hunghanfoo, who has been selected as the head of CPRL after Bakshi’s departure, told the news agency.

In order to know that from where this situation started then here is a recap; it all started when McDonald’s and Vikram Bakshi’s relationship went sour back in August 2013 when the latter was removed as the managing director of the joint venture, activating the bitter legal battle. Bakshi challenged his exclusion at the Company Law Board (now National Company Law Tribunal), claiming McDonald’s India of mismanagement and oppression.

McDonald’s had a 25-year partnership contract with Vikram Bakshi in the year 1995 to open its outlets in India in the North and East. The partnership was also a 50- 50 venture among McDonald’s India and Bakshi’s CPRL.