McDonald’s Struggles to Keep Its Inner Turmoil Under McWraps

McDonald's decided to toughen its policy for franchise ownership, saying a new term as a restaurant owner was to be "earned, not given," according to an internal memo that came to light this week. Over the course of the last few years, the burger giant has been steadily implementing additional fees and stricter rules for its restauranteurs, and these latest changes are now causing renewed turmoil among the ranks.

The National Black McDonald's Operators Association (NBMOA) returned a vote of no confidence on the chain's CEO Chris Kempczinski in late June, according to Restaurant Business. The publication also indicated that it's possible for the McDonald's Women Operators Network and the even bigger National Owners Association (NOA), to follow suit—unifying franchisees who disagree with leadership and the direction the company is taking.

A rising discontent gave way to an unprecedented vote, one that members of the group voiced never having experienced during their tenures in the McDonald's system.

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And this hasn't been the first time Black franchisee owners have expressed doubts about Kempczinski, who they say has been growing out of touch with the association for a while. Franchisees and ex-executives expressed outrage last year over a "racist" text the CEO sent to Chicago's mayor about the fatal shootings of Jaslyn Adams and Adam Toledo, according to Forbes.

McDonald's new franchise policies are stringent and include an increased number of annual inspections as well as new ways of evaluating those looking to open additional locations.

What many franchisee operators have expressed a specific dissatisfaction with is that McDonald's will now stop giving children or spouses of existing operators preferential treatment when applying for ownership. The new policies are set to launch in 2023.

For its part, McDonald's claims the changes are intended as quality-improvement measures as well as to attract a more diverse pool of franchisees to the brand. Operators, on the other hand, are having a hard time understanding this treatment from the company, especially when sales are at an all-time high.

Following McDonald's history over the years, this recent dispute is just one in a long line of issues between the company and its franchisees that include threats of lawsuits and the burger chain's CEO regularly downplaying the turmoil, according to Jonathan Maze, editor-in-chief at Restaurant Business.

"The sheer number of disputes in the system that spill out into the public makes me wonder whether something in the relationship between management and operators simply isn't working," Maze said in his analysis.

McDonald's company declined to comment on the specifics but instead pointed us to its new franchise rules.