McDonald’s India Pvt. Ltd, the Indian arm of the US food chain network, has closed down its 84 outlets in North and East India following a tussle between its Indian partner Connaught Plaza Restaurants (CPRL).
The outlets were shut down due to stoppage of supply by the company’s logistic partner Radhakrishna Foodland, Times of India reported.
Radhakrishna Foodland ended the supply to the joint venture by CPRL and McDonald’s due to alleged non-payment of dues.
“We are now having to airlift supplies and more outlets are likely to get affected over the next few days,” Vikram Bakshi, the owner of CPRL told Times Of India. “Radhakrishna Foodland has abruptly ended their services and the timing is a suspect because this is the peak season.”
The joint venture runs around 160 outlets in India. If the fight between CPRL and Radhakrishna Foodland continues, it will affect rest of the restaurants too.
While Radhakrishna Foodland alleges a non-payment of Rupees 2 crore from CPRL, Bakshi says that the amount is not part of regular monthly payments.
Instead, Bakshi alleged that the supply chain partner was blocking around 10 crores of his stock.
“They are holding back around Rs 10 crore of my stocks. I was ready to pay Rs 50 lakh up front to resume dialogue,” he said.
Radhakrishna Foodland, in a letter written to CPRL, had stated that it was discontinuing the supply to the company due to a reduction in demand uncertainty of the future.
“We had written three letters to CPRL and followed it up with several meetings with Mr. Bakshi, as even our regular payments were not being made and CPRL’s dues were ballooning. I am not ready to fund the collateral damage between two battling partners with my own money,” Raju Shete, promoter of Radhakrishna Foodland, was quoted as saying by Times of India.
In response to the allegations of Radhakrishna Foodland, Bakshi said in a letter to the landlords and developers of his outlets that McDonald’s had colluded with the logistic partner to give him a setback in the business.
“Our long-standing logistics vendor Radhakrishna Foodland allegedly in collusion with McDonald’s corporation and their wholly owned subsidiary McDonalds India Pvt Ltd…has decided to hold back stock paid for approximately Rs 10 crore by us,” Bakshi was quoted as saying by Business Today.
McDonald’s has been in a legal battle with Bakshi from 2008 after it revealed its intention to buy out his stake in the company.