McDonald's India asks food suppliers to stop doing business with CRPL

Answer: McDonald's

McDonald’s India Pvt. Ltd (MIPL) has asked its vendors to stop doing business with Connaught Plaza Restaurants Pvt. Ltd (CPRL), the north and east India licencee of the American fast food chain, reports Mint.

This is part of efforts to enforce the closure of 169 McDonald's outlets in north and east regions of India, the outlets are taken care of by CPRL. CPRL is a joint venture between MIPL and Vikram Bakshi. MIPL is the Indian unit of the US-owned food chain giant.

MIPL sent a letter to its suppliers saying that CPRL is no longer allowed to operate the fast food chain and it must stop the using McDonald’s intellectual property.

“As the master franchisor in India, earlier this week MIPL informed CPRL’s suppliers that we have terminated our franchise agreements with CPRL for all 169 restaurants in North and East India. As such, CPRL must cease the use of the McDonald’s system effective 6 September. CPRL is not permitted to operate McDonald’s restaurants,” MIPL told Mint via e-mail.

On August 21, MIPL ended its franchise agreement with CPRL.

The notice stated that Vikram Bakshi has to stop using the brand's name, trademarks, designs, branding, operational and marketing practice, policies, food recipes, and specifications from September 6.

“This will disrupt supplies to 169 restaurants as food recipes and food specifications are the intellectual property of McDonald’s India; CPRL is no longer authorized to use them. The agreements (of all suppliers) were with MIPL, not CPRL,” sources told Mint.

Vikram Bakshi said: “We have been reliably informed by suppliers to CPRL that they have received letters from Robert Vee Chong, a director on the board of MIPL, indirectly pressurizing them to stop supplies to 169 restaurants run by CPRL. As is evident, they will stop at nothing to cripple CPRL.”

However, he added that the suppliers do not have agreements with MIPL.

According to Bakshi, MIPL is "not permitted by law" to take any action or decision for CPRL.

McDonald's India vendors include Vista Processed Foods Pvt. Ltd for chicken, vegetable patties and fresh produce, Cremica Foods Industries Ltd for sauces, Mrs. Bector Food Specialties for burger buns, among others.

Bakshi said suspension of supplies will have a negative impact on the vendors' businesses.

Until now, only 43 McDonald's outlets were shut and the other McDonald's in the north and east region were operating. The restaurants in Delhi shut in June because CPRL failed to renew the license.