McDonald’s inspects CPRL-run outlets in Delhi
Checks come after Delhi high court refused to grant injunction restraining CRPL from using McDonald’s trademark
New Delhi: McDonald’s India Pvt. Ltd on Thursday conducted quality checks on the packaging and cartons in which fast food is being served at the McDonald’s outlets run by its north and east India franchisee Connaught Plaza Restaurants Pvt. Ltd (CPRL), said a person familiar with the development, on condition of anonymity.
CPRL is a joint venture between McDonald’s India and its estranged partner Vikram Bakshi, and operates 169 McDonald’s restaurants.
The checks came immediately after the Delhi high court refused to grant an ex parte injunction restraining CPRL from using McDonald’s trademark. McDonald’s India terminated its franchise pact with CPRL last year.
“It is a running business, we cannot put a stay,” justice Rajiv Sahai Endlaw said during the hearing.
The court granted permission to MIPL to inspect the packaging and cartons in which eatables are being served by the outlets.
A representative of McDonald’s India was allowed to visit 10 McDonald’s outlets in Delhi by Thursday evening to examine and collect samples of packaging and cartons.
Asked if the company had conducted quality checks, a McDonald’s India spokesperson said: “The suit to enforce the termination of our franchise agreements with CPRL is sub judice before the Delhi high court. We have no additional comments to share outside of the court.”
On 21 August, McDonald’s India had terminated its franchise agreement with CPRL, citing non-payment of royalties as the primary reason. CPRL was supposed to cease using the McDonald’s system (which includes proprietary rights in McDonald’s names, trademarks, designs, branding, operational and marketing practices and policies, and food recipes and specifications) and its associated intellectual property from 6 September 2017.
Following the termination, some McDonald’s suppliers discontinued their services to CPRL; they included its logistics and packaging partners. Bakshi is using generic packaging without the signature yellow “M” of McDonald’s (from the original packaging supplier) at all outlets and recently partnered with a new logistics firm to keep the restaurants running.
“We are yet to receive the court order but what is surprising is that McDonald’s needed a court order to check the packaging; our products and packaging are open to public. The packaging material is a part of every product one orders,” said Bakshi.
Meanwhile, another hearing on McDonald’s India’s plea to enforce a London arbitration court award that asked Bakshi to sell his stake in CPRL and Bakshi’s plea challenging the order, scheduled for Thursday, was adjourned to 16 January.
McDonald’s India and Bakshi landed in court in 2013, after the former voted against his re-election as the managing director of CPRL.
Bakshi challenged his removal at the Company Law Board (now National Company Law Tribunal, or NCLT), accusing McDonald’s India of mismanagement and oppression. NCLT reinstated Bakshi as managing director in July 2017.