Is McDonald’s Lovin’ the Big Change?

As people in North and East India might have noticed, McDonald’s outlets were closed for a few days. But very few people know the reason behind is. The truth is, the country’s favourite burger chain underwent a massive managerial change recently. There was a long-standing battle between the American fast-food giant and its partner for north and east India, Vikram Bakshi, and it ended with McDonalds buying out Bakshi’s share for an undisclosed amount. This out-of-court settlement was not a bolt from the blue though, it was long due. If you think about it, it does seem strange that the same man who brought McDonald’s into India, helped it become a part of the culture and thus secured a massive market share, was the  same person who got into a lengthy legal tussle with the company. So, let us get into the details of how it all unfolded.

In 1996, in a recently liberalised and globalised Indian market, Mr. Bakshi, a realtor, brought in McDonald’s as an attempt to take a break from his one-to-one reality sales job to a mass marketing initiative. He opened the world’s first beefless McDonald’s outlet in south Delhi. The idea to go for a no-beef and no-pork menu was a clever move to stay close to the sentiments of the average Indian, and thus find a way into the hearts and homes of every middle-class Indian. Innovations like the McAloo Tikki burger followed suit, which made McDonald’s seem less like a foreign brand and more like a homegrown brand which really got the ethos of the people. It goes without saying that the revenue increased dramatically with these moves. Connaught Plaza Restaurants Limited (CPRL) which was the official franchise of McDonald’s in India, started off as a 50:50 joint venture between Vikram Bakshi and McDonald’s India Private Limited.

By 2008, there were 70 McDonald’s outlets all over India. But by then trouble had started brewing. McDonald’s attempted to buy out Bakshi’s stake for 35 crores, the exact amount he had invested back in 1996.

In 2010, amidst all this, the venture reported massive profits to the tune of Rs9.32 crore.

In 2013, McDonald’s India had Bakshi removed as the managing director of CPRL, which he brought to the National Company Law Tribunal and had its favourable verdict reinstate him as managing director.

 McDonald’s claims that Bakshi was beginning to pay less attention to CPRL and more to his reality business, and the tussle continued until May 9th 2019 when McDonald’s India released this official statement:

“With the transfer of ownership and management…Mr. and Mrs. Bakshi end their association with CPRL and McDonald’s. We acknowledge the significant work and contribution of Mr. Bakshi in establishing McDonald’s restaurants in north and east India,”

CPRL’s future remains undecided as of yet, while the southern and western parts of the country are served their McDonalds favourites under the franchise of Mumbai-based realtor Amit Jatia.

How McDonald’s India plans on proceeding with this situation is yet to be seen, but we hope to get back the burger we are so used to lovin’.