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McDonald’s to buy out Vikram Bakshi in JV

US chain appoints new head; looks for partners.

New Delhi: US fast food chain McDonald’s and its Indian partner and franchisee Vikram Bakshi on Thursday announced an out-of-court settlement, ending their nearly six-year-long dispute.

As part of the agreement, McDonald’s will buy out for an undisclosed sum Bakshi and his entities 50 per cent stake in Connaught Plaza Restaurants Pvt Ltd (CPRL) that runs the McDonald's restaurants in northern and eastern India.

McDonald's also announced appointment of Robert Hunghanfoo as Head of CPRL with immediate effect. Hunghanfoo will be supported by McDonald's global leaders, along with the CPRL team, to facilitate a smooth transition, the US company said.

It said CPRL is now wholly owned by McDonald’s India Private Limited (MIPL) and its affiliate McDonald's Global Markets LLC (MGM), following the completion of a settlement reached with the former JV partner.

This follows "the acquisition by MGM of 50 per cent voting equity shares in CPRL, held since inception by Bakshi and his affiliated entity".

Commenting on the development, Hunghanfoo said: "Accomplishing a mutually agreed settlement in this matter means that our customers can now look forward to a reinvigorated, consistent and uniquely McDonald's experience when they visit us".

During the transition, MIPL will be focused on two key areas – providing employees with clarity and confidence in their future at McDonald's and leveraging its global system expertise to fortify high operating standards for local customers.

Ron Christianson, Global Head of Corporate Relations, International Developmental, Licensee Markets, McDonald's, said that the company is looking for a partner to run the operation in north and east India.

"We are still actively progressing the search for an ideal partner for North and East India. That process is still ongoing but certainly rest assured once we do, the ownership will transition to whoever the individual is," Christianson said.

On Monday, the estranged partners McDonald's and Bakshi had told the NCLAT that they were working towards an out-of-court settlement to end their dispute.

McDonald's and Bakshi in 1995 had signed a partnership agreement to open outlets of the fast food chain in India. It was for a period of 25 years.

The two partners had formed CPRL as a 50:50 joint venture.

The tussle between them started after Bakshi was ousted as the Managing Director of CPRL in 2013.

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