INDIA – McDonald’s 15 outlets in the North and East have hit a record high in sales for May, high above previous records, according to Connaught Plaza Restaurants(CPRL) MD Vikram Bakshi.
This follows a legal battle between McDonald’s and CPRL after McDonald’s India Pvt (MIPL) which runs McDonald’s outlets in north and east India terminated its franchise agreement with CPRL in August 2017.
McDonald has issued health advisories against purchases at restaurants run by CPRL citing that it is not involved in the operations of the CPRL-run outlets.
“In terms of sales, this is an all-time high since the opening of these restaurants,” Bakshi said, without commenting on specifics.
“The numbers prove that the consumer doesn’t care about the controversy.
There is nothing different or unique being done other than staying with the basics, which is ensuring regular supplies, quality of product and service.
All this despite the situation and conditions not being perfect for operating the restaurants,” Bakshi said.
According to CPRL data, sales were up anywhere between 2 and 17% across restaurants in Delhi, Kolkata, Gwalior and Lucknow.
In India, McDonald is battling other quick-service restaurant chains including KFC and Burger King which are also working on developments and investments to get a lion’s share in the aggressive pricing space.
ET Retail reveals that CPRL presently operates 164 stores, many of which had been shut down over the past one year, including a 140-seater store in New Delhi, among McDonald’s biggest in India.
Woes between McDonald and CPRL dates to August 2013 when the former terminated Vikram Bakshi, managing director (MD) of CPRL but after a legal suit, he was reinstated.
The US chain challenged the verdict in the National Company Law Appellate Tribunal (NCLAT) to no avail.
This followed termination of the franchise agreement between MIPL with CPRL for 169 restaurants operating across north and east India.
The former argued that the termination is a result of a breach, a violation of certain essential obligations that were a part of the agreement typically the default of payment of royalties to MIPL for two years.
Late last year, over 80 McDonald’s stores in north and east India had been shut down after CPRL’s logistics partner Radhakrishna Foodland discontinued supplies citing “reduction in volumes and uncertainty of the future.”
But according to Bakshi, all investments in CPRL have been internally accrued since early 2013.