Fast food chain McDonald's said on Monday it planned to shut all 169 of its restaurants in India's northern and eastern regions, escalating a dispute with its local partner and potentially putting thousands of workers out of jobs.

The U.S. company said it was "compelled" to take the action because its partner Connaught Plaza Restaurants Pvt Ltd (CPRL) had breached the terms of their franchise agreements.

The decision by McDonald's India follows a prolonged legal dispute with the partner that had already led to the temporary shutdown of more than 40 outlets starting in late June.