Tough decision for McDonald’s: the country where they must close 40% of their restaurants


McDonald's India

The American group has revealed on Monday its decision of closing 169 restaurants from India, about 40% of their McDonald’s joints currently opened in the country.

The harsh measure will seriously affect McDonald’s financial activity in one of the largest emerging markets in the world.

The world’s most popular brand will have to rebuild its network almost from scratch and they will also become forced to find a new partner for the northern and eastern regions.

Most McDonald’s restaurants in New Delhi have closed two months ago due to a dispute between the American group and Indian franchise holder Vikram Bakshi.

McDonald’s and Vikram Bakshi are associated with equal shares in the joint venture Connaught Plaza Plaza Pvt., which operates the 169 McDonald’s franchises in northern and eastern India.

“We were forced to end the partnership because of Connaught Plaza Restaurants Pvt. seriously violated the terms of our agreement,” McDonald’s India has reported.

Consequently, all McDonald’s restaurants operated by Connaught Plaza Pvt. will have to cease their activity within the following 15 days.

Technopark’s consulting firm estimates that India’s fast-food restaurants market is worth $1.5 billion and rises by about 15% per year.

With a population of 1.25 billion people, India is an attractive market for most fast-food chains.

However, foreign operators need to associate with a local partner in order to be able to unfold on the Indian market.

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