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McDonald’s operators consider a franchisee association

Operators are meeting to discuss a potential independent group, which would be a first for the chain.
Photograph Courtesy of McDonald's Corp.

Franchisees with McDonald’s are meeting today to discuss the potential formation of an independent franchisee association, a move that could signal a new era of troubled relations between the fast-food giant and its domestic operators.

The Wall Street Journal first reported the meeting. Sources have confirmed it to Restaurant Business.

In a statement, McDonald’s said that, “We always welcome and are committed to a constructive, collaborative dialogue with our franchisees. We will continue to work closely with our franchisees so they have the support they need to run great restaurants and provide quality experiences and convenience for guests.”

The meeting, known as the National Owners Meeting, comprises some of the largest franchisees in the McDonald’s system and could represent as much as 20% of the more than 13,000 domestic locations franchisees operate.

Independent associations are common in the franchising sector, as operators band together to take their concerns to the franchisor. But this would be a first for McDonald’s.

‘’There’s been secret meetings and secret organizations but the company could never do anything about it,” said Richard Adams, a former franchisee with McDonald’s who now works with operators as a consultant. He believes the owners meeting could be one of the biggest moments in the company’s history.

The primary issue that appears to be concerning operators is cash flow, after years of weak traffic despite numerous efforts to generate more traffic and sales. Operators have spent considerable resources in recent years to remodel restaurants to add kiosks and increase coffee offerings.

They’ve also been tasked with many other moves, including making fresh beef Quarter Pounders to order.

All of these efforts come as operators deal with mounting challenges finding and keeping employees. High wages are common throughout the industry, as are staffing challenges.

The franchisee meeting comes as McDonald’s has relied increasingly on its franchisees to operate restaurants. The company has sold most of its locations to operators and now runs less than 800 of the brand’s domestic store base.

It also comes as franchisees in other brands have grown increasingly vocal about problems with their franchisors. Just this week, the Jack in the Box franchisee association called for the replacement of that company’s CEO, Lenny Comma.

Franchisees in brands such as Tim Hortons and Subway have also been vocal about challenges in their systems.

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