Among the many legacies that Vikram Bakshi, the entrepreneur who exited a long-standing, precarious partnership with McDonald’s last week, leaves behind, is the Indianisation of the American burger chain.
Bakshi, who opened the world’s first beefless McDonald’s outlet in South Delhi in 1996, had aced the art of “cultural correctness”. With innovations like the McAloo Tikki burger, made from potatoes and peas, to no-pork menus, McDonald’s is a global brand fine-tuned for India.
The nod to cultural sensibilities has ensured wide patronage. Connaught Plaza Restaurants Limited, which was, until last week, a 50:50 joint venture between Bakshi and McDonald’s India Private, now operates 169 outlets in the North and East of the country. In the West and South, McDonald’s has a separate partnership with the Amit Jatia-led Hardcastle Restaurants.
Yet, internal discord within the partnership, and an ensuing legal battle, had capped further growth, even as rivals like Burger King chipped away at market share.
Now, the warring joint venture partners have arrived at an out-of-court settlement. Under the deal, the burger chain has bought out the stake of Bakshi and his wife from Connaught Plaza Restaurants Limited, for an undisclosed amount. McDonald’s India, along with its affiliate McDonald’s Global Markets, now wholly-own Connaught Plaza Restaurants Limited.
“With the transfer of ownership and management...Mr and Mrs Bakshi end their association with CPRL [Connaught Plaza Restaurants Limited] and McDonald’s. We acknowledge the significant work and contribution of Mr Bakshi in establishing McDonald’s restaurants in North and East India,” the company said in a May 9 statement.
The deal marks a new chapter for the burger behemoth in India, as it looks to put Bakshi’s legacy behind it.
Realty to restaurant
McDonald’s forayed into India in 1995 by forging partnerships with Bakshi, then a Delhi realtor who was looking to retire soon, and the Mumbai-based Jatia.
After starting out in real estate in 1986, Bakshi had entered the service apartments business in 1995, by setting up Ascot Hotels and Resorts. “Until then I’d made one-on-one sales in my niche [realty] businesses, and was keen to be a mass marketer,” he had explained the rationale for entering the fast food business to the Mint daily in 2017. The planned entry of McDonald’s to a newly-liberalised Indian economy was his chance, which he aced.
From the first outlet in Delhi’s Basant Lok, Vasant Vihar area, Bakshi went on to establish 70 outlets by 2008.
The big fight
The falling out, too, began that year when McDonald’s tried to buy out Bakshi’s stake for $5 million (Rs 35 crore) – the amount he had invested in 1996 in the joint venture. The Indian entrepreneur crossed swords with the multinational as he was in no mood to exit and believed his half of Connaught Plaza Restaurants Limited was worth much more.
McDonald’s maintained that Bakshi was mismanaging company funds and was paying more attention to his real estate businesses, neglecting the joint venture.
Despite no resolution in sight, the delicate partnership continued. But matters took an ugly turn in 2013 when McDonald’s ousted him as managing director of Connaught Plaza Restaurants Limited. Bakshi challenged his removal before the Company Law Board (now the National Company Law Tribunal), accusing McDonald’s India of mismanagement and oppression. National Company Law Tribunal reinstated Bakshi as managing director in July 2017.
Despite the public spat, Bakshi continued to expand the business. Connaught Plaza Restaurants Limited declared its first profit of Rs 9.32 crore in 2010. By the end of 2017, it had a network of 169 outlets.
Besides the restaurant and realty businesses, Bakshi has worked with the UK-headquartered Merlin Entertainments (the owner of Madame Tussauds) to bring a branch of the wax museum to India. He also sits on the board of the multiplex chain PVR as an independent director.
He owns 20 firms in the real estate and retail hospitality segment, and continues to be the chairman of Ascot Hotels and Resorts.
This article first appeared on Quartz.
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