Edit
Financing

McDonald’s franchisees seek a 'positive' impact

Operators at a meeting this week voted a “resounding yes” to forming an independent franchisee association.
Photograph courtesy of McDonald's Corp.

More than 400 McDonald’s operators, braving the oncoming Hurricane Michael, gathered together in Florida earlier this week and decided to go forward with plans for an independently funded franchisee association.

The group, calling itself the National Owners Association, may be the first such association in McDonald’s history.

According to a recap of the meeting on the group’s website, the association is being formed “to work with McDonald’s to positively impact the system for the benefit of franchisee owners, our employees, customers, the company and ultimately our shareholders.”

The association’s leaders include Blake Casper, a third generation operator based in Tampa, Fla., and Mark Salebra, a second-generation franchisee based in Florida.

Speakers at the event included Carmen Caruso, a Chicago-based franchise attorney, and Travis Heriaud, chair of McDonald’s Operator's National Advertising Fund, known as OPNAD. The group agreed to meet again in Dallas in December.

The meeting also included John Kujawa, who retired last year as McDonald’s U.S. vice president of franchising.

At the end of the meeting, Salebra asked attendees whether they needed a self-funded advocacy group. The answer was “a resounding yes from all attendees,” according to the website.

Leaders of the effort would not comment, referring to the website.

Franchisors typically keep advisory boards of franchisees, often elected by the operators themselves. But independent associations, funded and run by the franchisees separately from the company, are also common.

By banding together, such associations can bring common goals to the franchisor and advocate for the franchisees.

But these groups are typically borne out of tension between the franchisor and its operators. And their formation can intensify that tension, especially if the franchisor refuses to recognize the association.

That’s been the case in Canada, where Tim Hortons is battling with franchisees who recently formed the Great White North Franchisee Association—a battle that has been highly public north of the border, where a pair of the association’s leaders were kicked out of the system and the franchisees sued the company.

But the leaders behind McDonald's association are clearly hoping to avoid the appearance of animosity or do anything to damage the brand. The theme of the meeting, for instance, was called “Leading Together—Again.”

Kujawa, according to the recap, discussed the change in business philosophy at McDonald’s, and said that the best way to impact the system was to “work positively with the company.”

Still, the formation is a major change for a company that long prided itself on a collaborative relationship with its franchisees.

McDonald’s is actually late to the association game, though the company has had associations representing black and Hispanic owners and worked with both groups, said Robert Purvin, CEO of the American Association of Franchisees & Dealers, a group that promotes strong, independent franchise associations.

Many of McDonald’s rivals, including Wendy’s, Burger King, Subway and Jack in the Box, already have independent associations.

Purvin said McDonald’s has traditionally not needed such a group because it has historically had a collaborative culture with franchisees, often putting decisions to the operators.

“Historically, from my perspective, McDonald’s had a collaborative culture,” Purvin said. “Not with an association, but with lots of councils. A lot of authority has historically been transferred to or shared with franchisees. As a consequence, they never formed an association.”

He called the formation of a McDonald’s franchise association a “sea change” at the system.

That operators are forming one is a sign of change at a system that has refranchised most of its restaurants in recent years and cut hundreds of millions in corporate overhead. Franchisees operate nearly 95% of the chain’s nearly 14,000 U.S. locations, up from 80% over the past few years.

Franchisees recently have been asked to remodel locations, adding self-service kiosks. They’ve also started serving fresh beef quarter-pound burgers made to order, implemented new discounts, added equipment to increase coffee drinks, added curbside service and delivery.

Purvin, for his part, said that though tension can lead to the formation of an independent group, ultimately it’s always best when the association and the brand work together to accomplish a goal.

“Ideally at the end of the day the franchise association should want to be a partner with the franchisor to build a great brand,” he said. “It always works better.”

Trending

More from our partners