43 of the capital's 55 McDonald's will close today because their licenses have expired
Highlights
- More than 80% of the capital's McDonald's close today
- 1,700 people likely to lose jobs: newspaper reports
- Indian franchisee and the multinational are in legal dispute
43 of the capital's 55 McDonald's will close today because their licenses have expired, according to the Press Trust of India.
Several newspapers reported a dispute between the Indian franchisee that runs the fast food chain in North India - a company named Connaught Plaza Restaurants Pvt Ltd - and McDonald's.
"The decision to close down the outlets was taken during a board meeting via Skype on Wednesday morning," reported the
Economic Times.
The former top boss of the Indian firm, Vikram Bakshi took the international giant to court in 2013 after it said he could not remain the managing director of the equally owned joint venture.
Some reports said 1,700 employees will lose their jobs and that as a consequence of the dispute which began a while ago, health clearances for the Delhi outlets were not renewed.
"The Board of CPRL (the joint-venture) is working to obtain the required licenses. Pending this, CPRL is temporarily suspending the operations of the affected restaurants," McDonald's India Pvt Ltd (MIPL) spokesperson Barry Sum said.
He also said talk of "employees becoming jobless is erroneous."
"We understand that CPRL is retaining the employees of affected restaurants and will pay them their salary during the period of suspension," he said.