McDonald's India's strict conditions sour potential partners: Report
RP Sanjiv Goenka Group and the Bird Group are reportedly no longer keen on bidding for the McDonald’s north and east India franchise
November 13, 2019 / 11:41 AM IST
McDonald's India's strict conditions for its north and east franchise have halted talks between the fast food chain and potential Indian partners, according to a report by The Economic Times.
RP Sanjiv Goenka Group and the Bird Group are no longer keen on bidding for the McDonald’s franchise, sources told the publication. At present, Sanjeev Agrawal-promoted MMG Group is the only potential buyer.
MMG Group owns Moon Beverages, Coca Cola’s largest franchise bottling partner in India.
The new McDonald's partner will not be allowed to list on Indian stock exchanges and will have to pledge shares to the California-based parent company, the report said.
Moneycontrol could not independently verify the story.
“McDonald’s is actively progressing finding the right developmental licensee partner for north and east India,” McDonald’s Asia Pacific corporate relations director told ET.
Spokespersons of the RP Sanjiv Goenka Group, Bird Group and Moon Beverages declined to comment when approached by the paper.
“Of all the potential names in the running, talks with most have fizzled out because both sides haven’t been able to reach a consensus on the conditions,” a source told the paper.
The Indian partner will also have to pay $20-30 million on upgrading kitchens and pay 5 percent royalty to McDonald’s on all food even if the dishes has been innovated in India, the report said.
Another condition placed by McDonald’s India is non-exclusivity. This means any other company can set up McDonald’s outlets in India if they meet certain investment conditions, the report added.