95% Of McDonald's Franchisees Are Protesting. Here's Why
There's been some serious tension between McDonald's and its franchisees for a couple weeks now, ever since the company sent an email out on December 3 listing changes that could cost franchise operators a whopping $170 million in 2021 (via Restaurant Business). Now, 95 percent of McDonald's franchisees in the United States have voted to protest the changes by pausing on nonessential meetings with the restaurant chain's corporate office, according to a memo that the franchisees' leaders sent out on Monday (via Business Insider).
"The decision to consider a "pause" as franchisees is and has been intended to be a symbol of support for National Owner Operator elected leadership as the voice of the system," explains the memo from the National Franchise Leadership Alliance (NFLA). The alliance is an elected body that advocates for the franchisees owning and operating 95 percent of McDonald's restaurants in the U.S. The memo asks for "a recognition by McDonald's of our interdependence and to address the recent announcements."
Here are the proposed changes for McDonald's franchisees
The McDonald's email said that the company would cut subsidies for Happy Meals, would make franchisees help fund a costly employee education program, and would change how it charges for technology investments. All told, the changes are estimated to cost each location $12,000 per year. Considering that the restaurant giant generated a total revenue of $22 billion last year (via Statista), you can see why operators would be upset about unloading these cost onto their franchises.
What did they do about it? Franchisees held a call on Friday to talk about potentially cutting contact with the corporate office. The memo reveals that over 1,800 franchisees were on the call, despite having been given less than two days' notice.
Has McDonald's weighed in? The company said in a statement to Business Insider that it held a "productive meeting" with its franchisees yesterday morning. In typical noncommittal corporate fashion, the statement reads, "The company acknowledges the situation and will continue to make every effort to engage franchisees so that together we can effectively operate our businesses."