KANSAS CITY, Mo. – A group of McDonald’s operators are organizing a self-funded, independent owners association to advocate for their interests as franchisees. If formalized, the National Owners Association (NOA) would be the first organization of operators in the history of the McDonald’s business.
Approximately 400 owners gathered in Tampa, Florida, to discuss the state of the McDonald’s business and the relationship between franchisees and Chicago-based McDonald’s Corp. In a letter to McDonald’s operators posted to the NOA website, Blake Casper, a third-generation McDonald’s owner, characterized a shift in control from local owners to the national office as an attempt “…to nationalize all aspects…” of franchisees’ business. He said “…The next control change will be the transfer of Menu Board Pricing to Deloitte and Touche.”
“Our ability to price our menu boards may be one of the last controls we still have,” Casper said. “More importantly, I believe in our ability (with good counsel), to price and market to our customers all the while balancing the costs that are inherent to our business. I will gladly bet on 1,800 seasoned McDonald’s owners over the best Wall Street mathematicians.”
McDonald’s operators join franchisees of other quick-service brands seeking to wrest more operational and marketing control from corporate headquarters. The National Jack in the Box Franchisee Association (NFA) recently called for CEO Lenny Comma to resign and for the board of directors to replace the entire leadership team. Higher costs and increasing competition in the foodservice industry in general is driving changes in the franchisor-franchisee relationship.
The costs of implementing McDonald’s Corp.’s “Experience of the Future” and “Velocity Growth Plan” initiatives have weighed heavily on franchisees who are facing higher costs for labor, technology and changes in operational procedures such as using fresh, not frozen beef in its premium burgers. Additionally, McDonald’s announced in August plans to invest $4 billion to upgrade restaurants in 20 states. McDonald’s contributes about 55 percent of the capital toward the remodels with franchise owners covering the balance.
Another meeting is scheduled for Dec. 12 in Dallas to discuss the proposed owners association.