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McDonald’s shuts down in North, East India: 169 outlets close down

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Nimrat Kaur
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McDonald’s shuts down in North, East India: 169 outlets close down
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McDonald's India has terminated the franchise agreement for all 169 fast-food outlets in north and east India run by Connaught Plaza Restaurant Ltd (CPRL),  due to breach of contract terms and payment default. As part of the termination, CPRL is ceased to use McDonald’s name, system, trademark, designs and its associated intellectual property, among others, within 15 days of the termination notice. “The termination is essentially because of CPRL's violation of certain obligations as part of the agreement, including a default of payment of royalty to MIPL," McDonald's Corporation Global Head of Corporate Relations, Foundational Markets, Ron Christianson said. He further added, it has been two years since the royalty had not been paid and CPRL had been given enough opportunity to settle the breaches but they have failed to do so. "Today, we have issued the CPRL board a notice of termination of the franchise agreement between McDonald's India Pvt Ltd and CPRL for 169 McDonald's restaurants operated by CPRL in north and east India," the fast food chain said in a statement. McDonald's, however, said a priority will be given to mitigate the impact on affected parties such as employees, suppliers and landlords and it is open to working with CPRL to achieve this. The decision has been made after 43 outlets run by CPRL in the national capital were shut due to non-renewal of eating house licences. Responding to the termination notice, Vikram Bakshi said the decision is an open challenge to the NCLT judgement, which had directed the CPRL board to meet to discuss various issues. "We have been compelled to take this step because CPRL has materially breached the terms of the respective franchise agreement relating to affected restaurants and has failed to remedy the breaches, despite being provided with an opportunity to do so in accordance with the agreements," McDonald's India said. McDonald's India added that it is "committed to finding the right 'developmental licensee partner' for north and east India and taking steps to do so". -PTC News-
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