​McDonald's Exits Sri Lanka

​McDonald's Exits Sri Lanka

Posted by Emma on 20th Mar 2024

In a decisive move, McDonald's has ended its partnership in Sri Lanka, leading to the closure of all 12 outlets within the country, as confirmed by the company's legal representative, Sanath Wijewardane, last Sunday. Effective immediately from last Wednesday, the termination was attributed to unresolved quality issues with the local franchisee, Abans, who has refrained from commenting on the matter. "The parent company decided to terminate the agreement with the franchisee due to standard issues," Wijewardane stated, highlighting the potential for McDonald's return with a new partner in the future.

McDonalds Museum Bruce Marlin, CC BY-SA 2.5, via Wikimedia Commons

The background of the dispute involves allegations of subpar hygiene practices by Abans, prompting McDonald's to seek legal resolution. Despite the company's silence on the specifics, local reports have shed light on the legal proceedings initiated by McDonald's against Abans, citing failures to adhere to international hygiene standards. This legal challenge prompted the Commercial High Court of Colombo to mandate a temporary shutdown of McDonald's establishments, pending a detailed investigation, with proceedings set to resume early April.

McDonald's partnership with Abans, dating back to 1998, marks a significant era in the country's fast-food landscape. However, the recent financial turmoil in Sri Lanka adds a complex layer to the closure's impact, raising questions about future operations and the broader implications for international franchises in recovering economies.

As the legal battle unfolds and McDonald's navigates its strategy in Sri Lanka, the outcome of this separation could signal a turning point for both the company and its local consumer base. How will McDonald's adapt to this challenge, and what does this mean for the fast-food industry in Sri Lanka? Your insights are valuable - share your thoughts in the comments below.