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| Details |
Case Code: CLBS146
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| Case Length: 07 Pages |
| Period: 1996 - 2015 |
| Pub Date: 2017 |
| Teaching Note: Not Available |
| Subject :Business Strategy |
| Price:Rs.100 |
| Organization :-- |
| Industry :Food and Beverages (F&B) |
| Countries : India |
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McDonald's Franchise in India: Spiraling toward a Deadlock |
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| The case discusses the advent of McDonald’s India in the country through its two master franchises. Connaught Plaza Restaurants Private Limited (CPRL) run by Vikram Bakshi (Bakshi), and McDonald’s India was a 50:50 joint venture which operated the chain in north and east India. The second master franchisee, Westlife Development Limited (WDL) through its subsidiary Hardcastle Restaurants Private Limited (HRPL) run by Amit Jatia (Jatia), owned the master rights for the west and south India operations of MCD India. The case further describes the relations between McDonald’s and its master franchises and the way the two franchicees operated, which was as different as chalk and cheese. A friendly buyout of McDonalds’ stake by WDL launched HRPL into a high growth orbit while the strained relations with CPRL led to a spiraling toward a deadlock in the north and east. Due to the dispute with one of the master franchises, was McDonald’s losing ground in India?. |
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Issues: |
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- The franchising challenges faced by a multinational F&B company in emerging markets.
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- How franchisees are chosen and how profiling of prospective owners is done.
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- The role of real estate and litigation aspects .
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- Ownership Vs Licensing models.
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| Introduction |
| McDonald’s Corporation (McDonald’s), headquartered at Oak Brook, Illinois, United States, was started in 1940 by two brothers, Richard and Maurice McDonald, as a typical drive-through restaurant with a large menu and a car hop service. In 1948, to speed up the service, the menu was reduced to 9 items, the staple being the 15 cent hamburger. In 1961, the McDonald brothers sold off their business to Raymond Kroc (Kroc), who had been managing the franchise operations at McDonald’s. Under Kroc’s leadership, the company reached new heights in terms of growth and worldwide expansion. In 2015, McDonald’s had over 36,000 outlets spread over 119 countries across the world. It was the second largest fast food chain in the world after Subway. However, the global sales of McDonald’s were showing a slump in 2015... |
Keywords |
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McDonald,Vikram Bakshi,Amit Jatia,CPRL,Arbitration,QSR,quick service restaurants,Franchisee,real estate.
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US
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