(Image courtesy: Ada Derana)
Over 12 McDonalds outlets have been indefinitely closed in Sri Lanka, leaving nearly 300 employees in the lurch after the Colombo High Court issued an injunction restraining 12 restaurants operating in Colombo and its suburbs under the McDonald’s brand from operating.
The injunction order was issued after a complaint from the parent company over a dispute in their agreements. Many social media users were quick to share photos of McDonald's restaurant hoardings being brought down or removed.
There were restaurants in Kotahena, Nugegoda, Kiribathgoda, Battaramulla, Kollupitiya, Rajagiriya, Welisara, Mount Lavinia, Colombo City Centre, Macleod Road restaurant and Shangri-La restaurant.
Court filings shared on X (formerly Twitter) show that Abans illegally operated a McDonalds outlet at One Galle Face. Three others at Mt. Lavinia, Colombo City Centre, and Macleod Rd also had no franchise agreements. Another three – Colpity, Rajagiriya and Welisara -- had expired contracts.
In the court document, the plaintiff pleads that there are approximately 300 employees who are working across these outlets. The shutdown is said to last until 4 April 2024 and stems from allegations that local franchisee Abans failed to maintain the required standards of cleanliness.
According to a report on Numbers.lk, the shutdown will last until 4 April 2024 and stems from allegations by the global fast-food chain that its local franchisee Abans failed to maintain international hygiene standards.
McDonald’s attorney Sanath Wijewardane said: “The parent company decided to terminate the agreement with the franchisee due to standards issues. They are not in business in the country. They may decide to return with a new franchisee.”
Meanwhile, in a letter addressed to the Chief Regulatory Officer at the Colombo Stock Exchange, Sarashi Dubash, a director at Abans stated that the local franchisee of McDonalds is International Restaurant Systems. The majority stakeholder of this company is Rusi Pestonjee, who owns 98.73% stake in that company and who is also the managing director of Abans.
“International Restaurant Systems is not a subsidiary or nor an associate of Abans or its parent company Abans Retail Holdings. Due to the said reason the financials of International Restaurant Systems are not consolidated with the financials of Abans.”
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