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McDonald's franchisee group asks for a meeting with leadership

The National Owners Association, an independent group of the fast-food chain’s operators, says it is against new joint employer rules and wants a meeting with the company’s U.S. president.
McDonald's franchsiee dispute
McDonald's franchisees want a meeting with Joe Erlinger, the company's U.S. president. / Photo courtesy of McDonald's.

An independent group of McDonald’s franchisees wants a meeting with the company’s U.S. president amid an ongoing dispute arising from new operational standards and frequent store inspections.

In an email to members on Sunday, seen by Restaurant Business, the National Owners Association said that it wants to meet with Joe Erlinger to discuss “how certain McDonald’s actions have challenged our independence and created the potential for joint employer classification.”

But the group also said that it opposes legislation that would make it more likely that the company would be classified as a joint employer of its franchisees’ workforces. “The NOA does not want McDonald’s to be considered a joint employer and we are opposed to any legislation that makes the possibility of this more likely.”

McDonald’s and its franchisees have been in a dispute over the past year over new ownership requirements and operational standards, coupled with frequent new inspections.

The association, pushing to get the company to back off some of these changes, has taken that fight to the regulatory sphere. It helped push for new franchise regulations in Arkansas and, last week, came out with a statement that accused the company of “intimidation tactics” and said that if it didn’t want to be considered a joint employer, “then they need to stop acting like one.”

The company's response came through a group of 10 chairs of the company’s franchisee advisory councils, groups of operators that work with the company’s field offices. That statement sought to downplay the NOA’s impact, calling it a “small but vocal” group of operators—though the association represents more than 1,000 of the chain’s franchisees, or more than half of McDonald’s owners and about half of their restaurants.

But it is also notable that the statement came from the regional councils and not the National Franchisee Leadership Alliance, or the NFLA, an internal association whose leadership is voted on by the franchisees at large.

The NFLA did come out with a statement later in the week. “The NFLA, the elected representative voice of McDonald’s franchisee organizations across the U.S., is opposed to being a joint employer with its franchisor and is opposed to any legislation or regulations that would make that more likely,” according to the statement, which was provided to Restaurant Business.

It also said that a proposed new federal joint employer standard by the National Labor Relations Board would upset the balance of franchising. “The clear intent of such efforts is to undermine the franchise system and remove our independent ownership rights,” the statement said.

McDonald’s did not provide a response for this story.

The National Labor Relations Board has periodically, depending on the party occupying the White House, taken steps that could make it more likely that a franchisor is judged to be partially responsible for the workers employed by franchisees. Much of that effort is targeted at McDonald’s, the largest franchise system in the world. Franchise groups have argued that it would devastate the franchise business model by forcing franchisors to exert more control over their franchisees’ businesses.

But NOA has argued that McDonald’s is putting itself in position to be considered a joint employer by being too controlling of its franchisees. Its statement last week argued that McDonald’s own actions put it at risk of being a joint employer.

The idea that franchisees from the world’s largest franchise are suddenly arguing that McDonald’s is so controlling that it could be labeled a joint employer could potentially have a massive impact on the regulatory environment.

On Sunday, NOA said it wanted to discuss the matter with leadership. “We are ready, willing and eager to share our findings with Joe Erlinger,” the association said in its message. “We welcome an invitation to sit down with Joe and discuss remedies.”

But NOA’s Sunday message also sought to ease the perception that franchisees are divided and, indeed, one operator who is not a member of the group said that “90% of franchisees are aligned” on the topic of McDonald’s new inspections. It noted that its view is in line with the statement made by the NFLA that it doesn’t want any change in joint employer language that would make it more likely that McDonald’s would be declared as such.

“The two statements are not in conflict with each other and have much in common,” NOA said over the weekend. “Both NFLA and NOA agree that are constituents are opposed to being joint employers with McDonald’s. Both agree that we are independent contractors. Both agree that McDonald’s has stated they do not want to be a joint employer. Both confirm our unwavering support of the franchise business model.”

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