Franchisees of the McDonald's Corporation
The survey was taken by the National Owners Association, an advocacy group for McDonald's franchisees, which polled members for their opinions on the revised ownership policy rolled out by the company in June. Polled franchisees unanimously agreed that the company should have conferred with them concerning ownership policy changes, while a substantial 95% majority believed that the company did not have the best interests of franchise owners in mind with its changes. Most notable was the 87% majority that said they would support a vote of no confidence against Kempczinski and McDonalds U.S. President Joe Erlinger.
The changes to the agreement included an altered policy for processing new franchisees, with the company no longer giving preference to spouses and children of existing franchisees. The company is also altering the process for renewing leases, separating it from the process of assessing franchisees for authorization to run multiple restaurants.
Franchisees have voiced concerns that the changes could be a way to raise rates for new operators. McDonalds, however, has stated that the changes are intended to diversify its franchisees.
"We've been doing a lot of thinking about how we continue to attract and retain the industry's best owner/operators - individuals who represent the diverse communities we serve, bring a growth mindset and focus on executional excellence, while cultivating a positive work environment for restaurant teams," Erlinger said of the changes.
The relationship between franchisees and McDonald's corporate has been tense for a number of years. In 2014, franchisees polled by Janney Capital Markets held a largely negative view of the company, with the average rating given by respondents sitting at 1.94/5. Franchisees anonymously commented on the reasons for these ratings, noting the complexities of maintaining menus handed down by corporate and costly mandated, among other reasons.
More recently, changes to the company's grading system for restaurants were announced. Franchisees balked at the new "PACE" system, voicing concerns that the stricter grading standards would put further strain on the relationship between them and workers. That relationship is already at a relative breaking point for many franchisees, with class-action lawsuits from workers over insufficient COVID-19 safety measures still a very recent memory. For many franchisees, the decision to increase the burden on branch employees is poorly timed, with some noting difficulties recruiting new employees even with starting wages at $15 and above.
