mcdonalds india ltd

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  • 8/12/2019 McDonalds India Ltd.

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    Problem at Mc onald IndiaHistory of McDonaldMcDonald corporation was initiated by two brothers Mac and Dick Donald who after graduation started astore in Chicago for serving hotdogs and burgers as working lunch for the people doing jobs.

    The taste and quality of the food items soon became very popular and people from other part of the citystarted dropping by to have the food. 5 years later McDonald registered themselves as a brand and startedwith stores in ew !ork" #ashington D C" $os %ngeles and Detroit. &owever they still had not adaptedthe style of uniqueness in the quality and taste of the food.

    'oon" Mac and Dick thought of having a uniqueness in the taste of the food and so they designed a specialrecipe to make burgers and hot dogs and got it patented. They circulated this recipe to all its stores and thatis how McDonald(s strategy of uniqueness in taste came into e)istence.

    The earlier popularity and profits of the store was very high and this is was termed as world(s first *drive+through, restaurant. McDonald-s pioneered breakfast fast food with the introduction of the gg Mc muffin"in /012 when market research indicated that a quick breakfast would be welcomed by consumers. 3ive

    years later the company added a full breakfast line to the menu" and by /041 one+fourth of all breakfastseaten out in the nited 'tates came from McDonald-s restaurants.

    6n /075" McDonald-s Corporation went public. Common shares were offered at 822.59 per share. :y theend of the first day-s trading" the price had shot up to 8;9. % block of /99 shares purchased for 82"259 in/075 was worth" after /2 stock splits

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    $ater on" Connaught Blaa estaurants offered a contract to purchase the buns from an another bakery"Golden :akers" which was located in ew Delhi at a quotation rate of s 2F+ per bun. &owever" Golden:akers denied to sign the contract by saying it is not too profitable. &owever" the chairman of ConnaughtBlaa estaurant was the father in law of the manager of Golden :akers and hence he convinced him usingthis relation. The goods were acquired and were sold to McDonalds. The credit period that Mcdonald askedwas of 2 months and the credit period which was promised to Connaught Blaa restaurants by Golden:akers was ; months. &owever" in %pril 299/" / month after the goods were sold" Golden :akers suedMcDonald to either deliver the goods back to them or to give them s/F+ e)tra per bun. The argument thatthey used in the court was that the contract which they entered into with Connaught Blaa restaurants wasvoidable and hence they are declaring the contract Aoid and demanding the goods back or to be reinstatedwith more profits.

    Problem 26n 2991" when McDonald" after trying for 5 years finally tapped the metropolitan customers of 6ndia" it wasstill making losses in terms of presence in the other major cities" proper brand recall and being favoriteamong the youth. The creative director of McDonald" Mr 'anjeev Choksi" came with a diagnosis thatMcDonald(s food items lacked the 6ndian Taste and also they are not as cheap as compared to any otherregular food item available in an average 6ndian restaurant?n his suggestion" team McDonald introduced a campaign of 6ndian :urgers which claimed that it has thereal spices of 6ndia along with garlic paste and also at cheaper affordable rates.

    6t was however discovered by the management that using the real spices and specially a hand made garlicpaste will render the burger as a little costlier then what it is promised for in the ad campaign. :ut now asthe ad campaign was on air so it was not possible for the company to raise the rates of the burgers.To meet this situation" the company started using artificial colored garlic paste which was costing cheapercompared to the hand made paste so as to fit the burger at the rate which was promised in the campaign.&owever there was a social activist" from a Bolitical party" who found the real fact and sued McDonald forthis issue.

    QuestionsH./ Can Golden :akers succeed in the case against McDonald 6ndiaI Blease give your justification usingthe legal concept of 6ndian $aw.H.2 Can the social activist" in his case" against McDonald 6ndia" succeed.I Blease give your justificationusing the legal concept of 6ndian $aw.H.; #hich essential element as per the 6ndian Contracts %ct" was not present in the contract betweenConnaught Blaa estaurant and Golden :akersIH.= 6s there any remedy available to Golden :akersI Blease give your answer using the legal concept of6ndian $aw.