This is because of a protracted legal fight between the restaurant chain and former managing director of CPRL Vikram Bakshi.

Forty-three out of 55 McDonald’s restaurants in Delhi will shut down from Thursday, threatening the jobs of 1,700 employees, The Economic Times reported. The closure is the result of a decision by the board of directors of the Connaught Plaza Restaurants Ltd, the 50:50 local joint venture between former managing director of CPRL Vikram Bakshi and McDonald’s, following a dispute between the two parties.

“It’s unfortunate, but operation of 43 restaurants operated by CPRL has been temporarily suspended,” said Vikram Bakshi. The decision to shut down the restaurants was taken during a board meeting on Skype on Wednesday.

However, a media statement from McDonald’s said that CPRL would retain the employees at these outlets and pay their salaries even while the restaurants were not functioning.

CPRL has failed to get the mandatory regulatory health licences renewed because of the infighting between Bakshi and McDonald’s, Economic Times reported. Bakshi, who was ousted as the MD of CPRL in 2013, has been involved in a bitter legal fight with McDonald’s, and has taken the world’s largest food chain to the Company Law Board, which is yet to announce its verdict. Meanwhile, McDonald’s has been pursuing arbitration against Bakshi in the London Court of International Arbitration.

Marketing and branding experts feel that the closure of 43 restaurants will hurt McDonald’s, which was overtaken by pizza chain Domino’s in 2013 as the largest quick service restaurant chain in the country. “It’s a body blow for the brand,” said Ashita Aggarwal, head of marketing at SP Jain Institute of Management and Research. Brand strategist Harish Bijoor said that unless McDonald’s sorts out its legal problems, its brand will decline further.

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