McDonald's closes 169 restaurants in India in franchise dispute

McDonald's has closed its 169 restaurants in north and east India in a franchise dispute.

The US fast food chain, citing default in the payment of royalties, said on Monday it had terminated the agreement between McDonald's India Pvt Ltd and Connaught Plaza Restaurant Ltd (CPRL).

A 50-50 joint venture between local businessman Vikram Bakshi and the American company, CPRL, operated McDonald's restaurants in the northern and eastern regions.

McDonald's said CPRL will have to "cease using the McDonald's system (which includes proprietary rights in McDonald's names, trademarks, designs, branding, operational and marketing practice and policies, and food recipes and specifications) and its associated intellectual property in relation to these restaurants within 15 days of the termination notice".

McDonald's has had a long-running dispute with Bakshi, who was ousted as managing director of CPRL in 2013.

India's National Company Law Tribunal last month reinstated Bakshi as managing director of CPRL.

Bakshi said he would pursue legal measures against the termination of his franchisee agreement.

McDonald's had shut down 43 of its 55 restaurants in the Indian capital in June.

The closure of McDonald's entire business in northern and eastern India will hit thousands of employees.

The US firm entered India following the market reforms in the 1990s and today it operates more than 300 restaurants in 65 cities.

Its franchise partner in southern and western India is Hardcastle Restaurants Private Ltd.

-- BERNAMA