McDonald’s said on Monday it is shutting 169 restaurants in India run by Connaught Plaza Restaurant Ltd (CPRL) and said the outlets cannot use its brand for any operations.
The move means all McDonald’s outlets in north and east India including the capital New Delhi will close, although the company said it would look for a new partner.
McDonald’s outlets will remain open in south and west India, where it uses a different franchise operator.
The popular food outlet, which is known for graduating people from vada pao to a range of burgers, has seen its fortunes declining since past few years over a tussle with Bakshi for the management of CPRL, after he was ousted from the post of managing director of the McDonald’s franchisee in 2014.
“We have been compelled to take this step because CPRL has materially breached the terms of the respective franchise agreements relating to the affected restaurants,” the company said in a statement.
McDonald’s India further said that it is “committed to finding the right ‘developmental licensee partner’ for north and east India and taking steps to do so”.
McDonald’s shut over 40 of its restaurants in Delhi in June after they failed to renew their eating house licences.
CPRL is a 50:50 joint venture between entrepreneur Vikram Bakshi and McDonald’s, which handles all of the outlets of North and East India.
McDonald’s move could result in the loss of jobs for thousands of its employees, and hamper contracts of its suppliers.