McDonald’s franchise owners are mobilizing against corporate.
The franchisees, who operate 90% of McDonald’s restaurants, say the company is charging too much for rent, remodeling, and fees for training. Franchisees have reportedly been holding rogue meetings to discuss ways to get the company to bring costs down.
The higher costs mean that franchisees are “less likely to open new restaurants and refurbish them, potentially constraining sales,” The franchisees are currently paying up to 12% of store sales in rent. They’re asking the company to return to a “historic rate” of 8.5%.
McDonald’s answer is ” continuing to work together with McDonald’s owner/operators and our supplier partners to ensure that our restaurants are providing a great experience to our customers, which involves investments in training and technology.”
Opening a major restaurant franchise is impossible for the average American.
McDonald’s usually requires “$750,000 of non-borrowed personal resources” before considering an application, Taco Bell requires net worth of $1 million, while Burger King requires $1.5 million.
The franchisee controversy is the latest in a string of problems for McDonald’s.
Employees were striking for better wages last week.
Company executives are anticipating a rough few months as cash-strapped Americans watch what they spend.
McDonald’s also faces more competition than ever, as Americans turn to fast-casual chains like Panera Bread and Chipotle.