Thousands of employees await a solution following the Company’s termination of franchise agreement with CPRL.
McDonald’s is closing 169 outlets in North and East India region, following termination of its franchise agreement with Vikram Bakshi’s Connaught Plaza Restaurants Pvt Ltd (CPRL), which runs McDonald’s outlets in these regions. These restaurants will not be able to use the McDonald’s brand name going further.
This termination of agreement comes in the backdrop of breach of franchisee agreement by CPRL. Although McDonald’s had provided some time to remedy the breaches, CPRL failed to do so in the given period, which resulted in the cessation of contract.
Earlier, the Company had closed more than 40 of its outlets in Delhi after their Eating House Licenses expired.
With the latest closure of 169 outlets, thousands of employees may be rendered jobless. The move will also impact the large number of suppliers who work closely with these outlets.
The Company is hunting for new partners to run its business in this region, after the termination of the current franchisee agreement with CPRL.
McDonald’s issued a statement assuring that it will try and mitigate the impact of the shutdown on the employees, suppliers and landlords of these outlets, and that it will discuss with CPRL and offer a solution to the affected parties.