McDonald’s just earned a profit in India for the first time since launching in the country over two decades ago

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  • The global fast food major, McDonald’s, has finally recorded a profit of ₹6.52 million (US$92,426) in India since the time it debuted in the country in 1996.
  • McDonald’s India reportedly saw a loss of ₹3.05 billion last year, while the total accumulated loss for the food major since its launching was ₹4.21 billion.
  • The fast food giant has been embroiled in a legal battle with one of its main franchisees — Connaught Plaza Restaurants (CRPL) — for over five years now — that resulted in a termination of the franchise agreement.
After over two decades and despite the popularity of its ‘aloo tikki’ burgers in India, global food giant McDonald’s has reportedly turned a profit in the country.

The company entered the Indian market in 1996. It reportedly earned a profit amounting to ₹6.52 million (US $92,426) for this financial year (FY17-18), ET reported citing data with Indian regulators.

Since launching, McDonald’s has worked in sync with two licensed partners in India — Connaught Plaza Restaurants (CPRL) for the North & East region and Westlife Development for West & South.

However, in 2013, it got embroiled in a legal battle with CRPL that has been ongoing for five years now and has impacted its financial performance over the years. In 2017, the company reportedly saw a net loss of nearly ₹3.05 billion, swinging to the profit of ₹6.52 million this year. However, the overall loss for the food major was ₹4.21 billion.

While McDonalds launched in India in a joint venture with CRPL, it reportedly expelled Vijay Bakshi, then managing director of CRPL, discontinuing its franchise agreement for its 169 outlets, resulting in a legal battle between the two.

Presently, the fast-food chain is spread over 400 locations in India. In fact, it is planning to expand its footprint with over 500 more outlets across the country, four years down the line.

The company has stated that it has now managed to grow out of its loss-making phase and been able to stem the erosion of its profits.

In general, India’s fast-food market continues to expand at a healthy pace and is expected to reach $21.2 billion this year, market research firm Euromonitor International said earlier this year.

See also:
Indian government tightens rules: E-tailers like Flipkart and Amazon won't be allowed to sell products by companies they back

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