McDonald's Just Made A Big Move With Its Florida Restaurants
For six decades, Florida's Casper family built their family fortune by hitching their wagon to McDonald's fast food star. As McDonald's Atlanta-based vice president Jason Clark wrote in an internal memo, "The Casper legacy with McDonald's began in Chicago 64 years ago in a men's clothing store. Ray Kroc and Fritz Casper became fast friends with their love for great clothes, a winning optimism, and a keen eye toward the customer," per Nation's Restaurant News. Fritz Casper would go on to open the first McDonald's in Florida, and by 2018, the Caspers Company was operating 60 restaurants across Tampa and Jacksonville.
And it didn't end there. Per Restaurant Business, the relationship between Mcdonald's and Caspers Company was such that these restaurants would often be used to try out new ideas and initiatives which were generated by the head office. But that long-term relationship comes to an end on October 1, when Caspers sells the franchises back to McDonald's for an undisclosed sum, believed to be in the nine-figure realm. The move, per the Tampa Bay Business Journal, is part of McDonald's plan to buy back restaurants and bring in new franchisees under a program aimed at diversifying restaurant ownership. The family is said to want to retire when the transaction is completed.
Many franchisees have been unhappy
While it might seem sad to see a business that is handed passed on from generation to generation like the Caspers Company walk away from its long-time franchising business, the move comes at what can only be described at an awkward time for the Golden Arches.
Restaurant Business reports that the value of a restaurant is at a record high — its sale price is seen at "ten times EBITDA" — which stands for "earnings before interest, taxes, depreciation, and amortization," yet, franchisees don't appear to thrilled to be a part of the McDonald's family.
In April, a survey of franchisee sentiment conducted by Kalinowski Equity Research showed that on a scale of 1 to 5 with 1 being poor, and 5 being excellent, franchisees felt that their relationship with McDonald's was ranked at 1.19. This is the worst ranking on the survey in the past decade (per 1851 Franchise).
Disgruntled franchisees speak out
A number of the franchisees didn't hold back when they were asked why they were dissatisfied. One mentioned a new McDonald's company rule and groused, "I have NEVER seen operator morale so low. The new inspections will hurt sales badly. Now is not the right time for this because we are already badly understaffed. And unions are coming. McDonald's doesn't care about the Operators, it's a 'my way or the highway' theme for them. They treat us as if we are a dime a dozen. The 'partnership' is dead. We need some civil disobedience to wake them up, but the NFLA [National Franchisee Leadership Alliance] is under McDonald's thumb, they are a bunch of lemmings. And corporate won't help at all because they are afraid of 'joint employer' and are getting rich off the stock price," via Kalinowski Equity Research.
Another responded to how McDonald's is changing franchise policies and said, "McDonald's has made it crystal clear that they no longer want or need veteran owners, who built the system and ensured our successes. They desire to move on to those owners that they can easily manipulate and control." A third put it down to where they thought McDonald's profits were expected to go for the remaining half of the year. "Our corporate 'partner' will make a lot of money this year. Their franchisees? Not so much."