McDonald’s says it can’t vouch for the quality of 40% of its restaurants in India

Running into trouble.
Running into trouble.
Image: AP Photo/Bikas Das
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McDonald’s is unsure about what’s being served in over 100 of its restaurants in India.

The American fast-food chain has said that there are “serious compliance risks” involving food quality and safety at 169 of its outlets entangled in a legal battle with local partner Connaught Plaza Restaurants (CPRL).

The warning comes close to four months after McDonald’s India (MIPL) issued a notice of termination of its franchise agreement with CPRL, alleging that the latter had breached the terms of their partnership. It barred CPRL from using its brand name, trademarks, designs, and food recipes. CPRL has, however, continued to run these outlets in northern and eastern India.

“Since the termination of the franchise agreement, MIPL has not been able to verify if the unauthorised McDonald’s restaurants operated by CPRL in north and east India are complying with applicable McDonald’s standards, including those pertaining to supplies, operations and safety standards, and quality required for McDonald’s products,” an MIPL spokesperson said over e-mail.

MIPL has called for an immediate closure of these restaurants.

The two entities have been embroiled in a legal battle since 2013 over the ownership of the restaurant chain’s business in north and east India. Tensions escalated earlier this week after 84 of these restaurants were shut down after a key logistics partner withdrew support.

McDonald’s estranged Indian partner subsequently found a replacement and promised to re-open them by the end of the year. But MIPL has alleged that “using unapproved vendors for the supply chain is creating serious compliance risks to McDonald’s standards for food quality and safety.”

CPRL managing director, Vikram Bakshi, dismissed the allegations. “It is indeed ironic that the conscience of McDonald’s has suddenly awakened to quality and food safety in India, when for the past four years, CPRL has been bringing to their attention, including their CEO, Steve Easterbrook, issues of the same, without extracting a single response or visit from them,” Bakshi said in an e-mailed statement.

He said the issues his firm raised around public health have been “blatantly ignored by the American company with no responses, visits or actions…”

McDonald’s has been in India for close to two decades and runs over 400 restaurants here. In south and west India, it operates through Westlife Development, a master franchisee that manages over 260 restaurants. The others are run by the beleaguered CPRL. The American fast-food major is now reportedly scouting for a new business partner to run stores in north and east India.