McDonald’s not Leadership Worried About Franchisee Relationship

On a recent earnings call, McDonald’s CEO Steven Easterbrook said he was unconcerned over pushback from many newly unified franchisees within the restaurant chain’s system.

Last October, a group of franchisees within the McDonald’s network banded together to form what they’ve dubbed the National Owner’s Association (NOA) to speak with a single voice to the home office. Today the group claims it represents more than 400 owners of the famous brand’s restaurants—about 25% of U.S. franchisees.

The group’s first order of business was to voice concern over the company’s pricing mandates and decreasing profits, and to push back against McDonald’s plans to remodel 14,000 U.S. locations by 2020, a project that will see locations decked out with new furniture, kiosks, curbside pickup and other upgrades. The home office said it would shoulder 55% of the costs.

The NOA’s discussions with the home office led to the franchisor’s decision to move the remodeling deadline to 2022, though franchisees that take longer to comply will see a reduction in financial support from the company.

Easterbrook’s view is that franchisee gripes are not unusual, and he doesn’t see the organization’s concerns as a threat to future growth and development. Says Easterbrook: “Am I fundamentally concerned that it will derail us from the shared vision that we have? No, not at all.”

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