Vikram Bakshi on Friday offered to sell his 50 per cent stake in Connaught Plaza Restaurants, the joint venture with McDonald's that operates fast-food restaurants in north and east India, for Rs 1,800 crore (Rs 18 billion).
The estranged Indian partner of McDonald's, Vikram Bakshi, on Thursday offered buying out the US food major's stake in their joint venture Connaught Plaza Restaurants.
As part of the agreement, McDonald's has acquired 50 per cent voting equity shares in Connaught Plaza Restaurants, held by Bakshi and his affiliated entity since inception.
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The war of words that has broken out between Vikram Bakshi and McDonald's Corporation is the latest in the long list of ugly spats between Indian businessmen and their overseas collaborators.
Bakshi had moved the application under Section 9 of the Conciliation and Arbitration Act, dealing with foreign arbitration and foreign tribunals.
McDonald's has argued that the dispute with its Indian joint venture partner Vikram Bakshi should be referred to arbitration as per the clauses of their agreement.
The war of words that has broken out between Vikram Bakshi and McDonald's Corporation is the latest in the long list of ugly spats between Indian businessmen and their overseas collaborators.
US-based McDonalds will set up 40 outlets ever year through its two equal joint ventures in the country -- Connaught Plaza Restaurant and Hardcastle Restaurants.
McDonald's is adopting differential pricing, new formats and designs to stay relevant to customers who are spoilt for choice.
In his petition to the Company Law Board filed on September 9, Bakshi said McDonald's began 'arm-twisting' him to sell his entire shareholding in Connaught Plaza Restaurants, the equal joint venture between him and McDonald's since 2008, at an 'undervalued' price of $5 million, later raised to $7 million.
Cloud on whether CPRL is a subsidiary of McDonald's India or a 50-50 venture.
Bakshi rejects McDonald's proposal to buy his stake in JV for Rs 48-50 crore
Bakshi said the attempt by McDonald's to terminate its agreement with him was illegal and not binding and would have no bearing on the shareholding pattern (the partners hold 50 per cent each), board composition (both sides have two nominees) or the working of the company.
On August 30, McDonald's had announced in a public notice that Bakshi would no longer be the India MD and the JV would be run by the board.
Global fast food chain McDonalds, which entered India over a decade ago, plans to export dishes from its unique Indian menu to please the western palate, having tasted success in the middle-east market.
Differences between Bakshi, his wife and McDonald's India emerged in mid-2013.
The two parties have also approached the Delhi high court pleading that two earlier court orders be modified allowing Bakshi to sell his shares in Connaught Plaza Restaurant to McDonald's India.
Vikram Bakshi, the estranged partner of fast-food chain McDonald's, will seek reinstatement as managing director of the 50:50 joint venture Connaught Plaza Restaurants, with a plea to the Company Law Board seeking the 'deadlock' in the August 6 board meeting be resolved.
Vikram Bakshi, who controls 50% in JV and was MD, weighs legal options
Oil content in mayonnaise slashed by 40 per cent, milk used in ice-creams 96 per cent fat-free, all wraps made of whole grain.
Food chain rejects Bakshi's offer of Rs 1,800-cr for stake; CLB gives it till Nov 25 to make a counter-offer.
43 McDonald's outlets in New Delhi-National Capital Region were forced to down shutters following lapse of their eating-out or health licences in June.
Vikram Bakshi says the 169 stores will remain open, McDonald's says it will take steps to enforce termination.
CPRL Board may meet this week to decide if the outlets in the north and east of India can be kept open till the matter is settled in courts
When Amit Jatia, vice-chairman of Westlife Development (WLDL), which operates fast-food chain McDonald's in West and South India, wanted to become the American fast-food giant's local partner in 1995, he had to first convince his family he would remain a staunch vegetarian. As McDonald's - home of the iconic Big Mac - completes 25 years in India, being one of the largest operators in the quick-service restaurant (QSR) segment in the country with over 300 outlets, Jatia has held on to the promise he made to his family. Not one to sit back and watch anyone flip the Big Mac, he gets straight to the meat of the matter when he says McDonald's success menu will see the QSR expand its ever-hungry 'foodprint' by doubling the number of joints and increasing its average unit volume by 35-40 per cent in five years.
Default in payment of royalties to McDonald's India for nearly two years was the key reason behind the fast-food chain's decision to terminate franchise agreement
It is not easy for an FMCG brand to make a comeback if it has been out of consumer's reckoning for some time. Moreover, a protracted battle between the owners and then closure of a large number of outlets at one go might have sent some very negative signals to many, says Sneha Bhattacharjee.
McDonald's problems couldn't have surfaced at a worse time. Cut-throat competition, rapid expansion and a slowdown in consumer spending in the wake of demonetisation have seriously dented the overall quick-service restaurant business.
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