McDonald’s to Close 169 Locations in India Due to Dispute

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McDonald’s Corporation (NYSE:MCD) announced that it will shut down 169 locations in India.

McDonald's

The burger chain has had a tumultuous relationship with restaurants located in the northern and eastern regions of the Asian country over the last nine years. McDonald’s has struggled to expand in these regions.

The business entered India in 1996 and issued licenses to New Delhi property magnate Vikram Bakshi, as well as Connaught Plaza Restaurants. Both of these parties were responsible for running its locations from Punjab to Kolkata.

McDonald’s contacted Connaught Plaza Restaurants recently, notifying them of a termination of agreement that will give the company 15 days from August 21 to cease using its branding and recipes.

The company’s U.S. group said that the move was issued due to Connaught Plaza restaurants violating “certain essential obligations in the franchise agreements” such as royalty payments. The Indian company has also failed to keep up with licenses of 43 restaurants in New Delhi, which closed back in June.

Connaught Plaza Restaurants said it is considering pursuing legal action following this notice, which was preceded by a lengthy legal battle between the two parties. The company also claimed McDonald’s decision was “mindless and ill-advised.”

“Appropriate legal remedies that are available under law are being explored,” the group said in a statement.

Meanwhile, McDonald’s is seeking a new partner in northern India.

MCD stock surged 0.8% Tuesday.


Article printed from InvestorPlace Media, https://investorplace.com/2017/08/mcdonalds-corporation-mcd-5/.

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