Mired by ownership battle, McDonald’s shuts 80% Delhi outlets as hygiene take toll

Ownership tussle between Vikram Bakshi & McD dented CPRL’s growth, hurt profitability since 2013

McDonald, soft drink, beverage, McD

Today’s Paper : Fast food major McDonald’s is shutting nearly 80 per cent of its stores across Delhi-NCR starting today. Connaught Plaza Restaurants Pvt Ltd (CPRL), which runs the McDonald’s franchise for North and East India, has been forced to close down 43 of its 55 outlets in the region as it failed to secure regulatory health clearances to keep the business rolling.
While the move could prove to be lethal for the firm, maintenance of quality and hygiene at the stores had been an ongoing issue since mid-2013.

The decision comes at a time when the long-drawn battle over the ownership of CPRL between its founder Vikram Bakshi and McDonald’s India has dislodged the company from the growth track. The conflict has also hampered its profitability, while most other quick service restaurant chains have managed to grow. CPRL is a 50:50 joint venture between the two and is currently operated by four board members — Vikram Baksi, his wife, and two representatives of McDonald’s.

According to data available at the Registrar of Companies, Ministry of Corporate Affairs, CPRL’s revenue growth fell to six per cent in 2014-15 compared 29 per cent in 2010-11 as investments came to a standstill. The slide being pronounced in 2014-15, when CPRL posted Rs 645 crore revenue compared to Rs 609 crore in the previous year.

In 2013-14, too, revenue growth halved to eight per cent from 16 per cent in 2012-13. In 2012-13, CPRL generated Rs 562 crore in revenues and in the previous year it stood at Rs 490 crore. Data has been sourced from the industry. | READMORE…

 

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