169 Restaurants Look, Taste Like McDonald's. They Aren't

McDonald's Indian partner refuses to close franchises
By Arden Dier,  Newser Staff
Posted Oct 15, 2017 12:05 PM CDT
169 Restaurants Look, Taste Like McDonald's. They Aren't
Indians walk past a McDonald's outlet in New Delhi, India, on Aug. 22, 2017.   (AP Photo/Altaf Qadri)

McDonald's has an unusual problem in India: It recently severed ties with a partner that helped bring the Golden Arches to the nation, but now that company refuses to stop selling McDonald's food under the McDonald's name. In all, about 170 restaurants have "gone rogue," in the words of the Wall Street Journal. Back in August, McDonald's canceled its franchise agreement with Connaught Plaza Restaurants, which operates 40% of McDonald's outlets in India. But rather than close up shop, the restaurants are operating as usual. McDonald's has been pressuring suppliers to cut off deliveries with mixed success, and Connaught Plaza's managing director, who brought the chain to India in 1996, hopes to keep the food flowing for as long as possible.

“I cannot allow a large organization, this [multinational] monster, whatever you want to call it, to truly belittle our contributions,” says Vikram Bakshi. McDonald's, meanwhile, accuses Connaught Plaza of various contractual issues, including a failure to pay royalties. Bakshi's legal battles with McDonald's actually stretch as far back as 2008, and this latest round is expected to drag out in the courts as well. India has a growing middle class, and that theoretically makes the country a great market for McDonald's, notes the Economist. But it adds that this recent trouble "illustrates multinationals’ worst fears about India, from the instability built into the joint-venture model to the ease of stymieing legal judgments." In the meantime, the Maharaja Macs continue to be served at the non-McDonald's McDonald's. (More McDonald's stories.)

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