Talks between McDonald's and Indian partners reportedly hit a roadblock after the American fast food giant prescribed stringent norms for its north and east franchise, said a report in The Economic Times.
According to the new norms laid down by McDonald’s for its partners, the new partner will not be allowed to list on the stock exchanges and all shares of the company that operates McDonald’s outlets in the north and east must be pledged to the parent company of McDonald’s, said the report.
RP Sanjiv Goenka Group and the Bird Group are reportedly no longer keen on bidding for the McDonald’s franchise, said a report in Moneycontrol citing ET report. At present, MMG Group of Sanjeev Agrawal is the only potential buyer, the report said.
In May this year, McDonald's had said it reached an out-of-court settlement with estranged partner Vikram Bakshi, buying out the former partner from their joint venture that operated outlets of the chain in north and east India.
Connaught Plaza Restaurants Pvt Ltd (CPRL) is now wholly owned by McDonald's India Pvt Ltd (MIPL) and its affiliate (McDonald's Global Markets LLC, "MGM"), following the completion of a settlement reached with Bakshi, the company said in a statement.
As part of the agreement, MGM has acquired 50 percent voting equity shares in CPRL, held by Bakshi and his affiliated entity since inception.
CPRL operates McDOnald's outlets in north and east India. The company, however, did not disclose financial details of the settlement.
In August 2017, McDonald's had terminated franchise agreement for 169 out of its 430 fast food outlets operated by Bakshi-led CPRL in north and east India, alleging breach of contract terms and payment default by the operator.
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Updated Date: Nov 13, 2019 20:04:00 IST