McDonald’s East and North which is struggling to have potential partners since its global partner terminated agreement with its JV partner CPRL on August 21, clearly mentioning that CPRL would not be authorised to use the McDonald’s branding, trademark, design and marketing policy rights within 15 days of the termination notice, starting September 6. However, around 15 stores of the 169 stores across the north and east region are operational even after the deadline set by the termination notice.
The joint venture between both the delegates started getting bitter in 2013 when Vikram Bakshi was ousted as managing director of the group. Continuous issues relating to quality, food safety and standards of the burger chain was continuously reported and were talk of the town since then. It was earlier in August when Bakshi was reinstated as managing director of CPRL by the National Company Law Tribunal, following which McDonald’s approached the appellate tribunal. McDonald’s sought arbitration in 2013-end after Bakshi took the chain to the Company Law Board following his termination as managing director of CPRL.
McDonald's entered the Indian market in 1996 as a joint venture (JV) between Oak Brook III and two local partners – Hardcastle Restaurants Private Ltd. in western India, and Connaught Plaza Restaurants Private Ltd. in northern India. Since then, there was no looking back for the world’s top most burger chain in the region opening doors for many international brands to India. And, at a time when the global burger chain is facing turmoil, there is lots of opportunity being created for the fellow competitors to overtake McDonald’s business in North and East region. Burger King which is second largest burger chain globally is already talking to many of the McDonald’s real estate partner to setup Burger King outlets at those locations. Carl’s Jr which is another competitor has already signed five of those locations where McDonald’s was operational. Hence, at a time when the group is facing legal hurdles and battles, these six companies could be their potential partner to take forward McDonald’s glorious journey in India.
Hardcastle Restaurants: Amit Jatia who owns Hardcastle Restaurants could be the most potential partner for McDonald’s in East and North as he is already running the business in West and South region setting up almost 261 successful outlets and McCafes business. The group has continuously outshines the business in the region meeting all food safety, standards and quality issue. On the other hand, McDonald’s USA may not want to give Jatia the sole right to run the business Pan India as he has all together a different goal to meet.
Speciality Restaurants: Owned and spearheaded by Anjan Chatterjee, Speciality became first Restaurant Company in India to hit IPO in 2012 and is successfully running a mix of brands and category under his venture. Since, he understands the right mix of the business and luckily doesn’t run and operate a burger brand; he can consider as a prospect for McDonald’s business in India. Alternatively, Chatterjee has hardly tried his hands on setting up a QSR chain; hence the deal may not turn on a win-win side for both the partners.
Bharti Group: Popularly known as the Airtel family group, Ramit Mittal son of Rakesh Mittal got globally famous casual dining pizza chain PizzaExpress to India in 2012. Wanting to make PizzaExpress one of the popular pizza chain in India, Ramit Mittal could also look at McDonald’s expanding their wings into the category as Italian especially burger and pizza being the third largest cuisine in India to be eaten. As an another option, Ramit could also let it go as he is still trying to build the pizza business in India which in itself has a long way to go capturing the target group of the likes of Domino’s and Pizza Hut.
Lite Bite Foods: Promoted by India’s largest corporate family icon, Dabur; Lite Bite Foods has already got an experience of running QSR chains at locations like High Streets, Malls, Airports to name a few. Looking at McDonald’s right for North and East region LBF may get in as a likeminded partner known for setting up more than 100 operational outlets. The group has also indicated that they would be happy to look at proposal if approached by McDonald’s. Though, it may not turn out to be a good deal as Lite Bite has got similar kind of concepts running under its umbrella; it would focus more in its in-house brand than retaining McDonald’s lost identity in the region.
K Hospitality Corp: Built on strong heritage of over 40 years; they were the first brand to get international tie ups in India. Running a mix of categories and outlets knowing all the global standards the group spearheaded by Sunil Kapur could get a chance of being McDonald’s north and east partner. Also, as the group is responsible for building all the airports outlets via their Travel Food Service wing, McDonald’s could get a chance of being present at some of the top airports including Indira Gandhi through them; making a more visible comeback identity. On the other hand, as the group has always focused on casual dining and fine dining as segment it may not turn out to be suitable partner.