The Connaught Plaza Restaurants (CPRL) board took an unprecedented move, to shut down 43 out of 55 outlets of McDonalds in Delhi from Thursday.
The closure is because of the decision by the board of directors of the Connaught Plaza Restaurants Ltd, the 50:50 local joint venture between former managing director of CPRL Vikram Bakshi and McDonald’s, following a dispute between the two parties.
“It’s unfortunate, but operation of 43 restaurants operated by CPRL has been temporarily suspended,” said Vikram Bakshi. The decision to shut down the restaurants was taken during a board meeting on Skype on Wednesday.
The sources reported that CPRL board failed to get the mandatory regulatory health licences renewed because of the infighting between Bakshi and McDonald’s, resulting 1,700 to lose job.
Marketing and branding experts feel that the closure of 43 restaurants will hurt McDonald’s, which was overtaken by pizza chain Domino’s in 2013 as the largest quick service restaurant chain in the country. Ashita Aggarwal, head of marketing at SP Jain Institute of Management and Research said, “It’s a body blow for the brand” . Brand strategist Harish Bijoor said that unless McDonald’s sorts out its legal problems, its brand will decline further.
By: Simran Dhingra.