McDonald's faces revolt of franchises

McDonald 's, which already is facing difficulty to grow in the United States, now are faced with a revolt among its franchisees. According to the operators of coffee shops, the company has charged increasingly high rates-including rentals, training and software-to improve your final results.
The rising costs are making the franchisees, operating almost 90% of more than 14.1 million Diners in the United States, less inclined to renew contracts and open new stores, which potentially limits the sales.
"McDonald's has been doing everything it can to pass the costs for operators," said owner Kathryn Slater-Carter, who in June met with other operators of shops to discuss ways to press the network to reduce values.
"Too much Focus on Wall Street is not a good thing in the long run. It is not an activity as profitable as it used to be, "said Kathryn, which supports the adoption of a new law requiring minimum standards of treatment of franchisees. This legislation, discussion, also would allow franchisees to join freely with owners of other coffee shops.
Asked if McDonald's is downloading costs to the franchisees, Heather Oldani, spokesman for the chain, said in e-mail, that the network "works continuously with the operators/owners" to ensure that the network provides "an excellent experience for our customers, which involves investments in training and technology".
Lee Heriaud, who chairs the National Council of leaders, group of franchisees that reunites with chain executives to discuss ideas and concerns, participated in meetings with the fast-food chain. Heriaud received from a network spokesman communicated by e-mail that described the meetings between McDonald's and the franchisees of "productive" and with the spirit of keeping the "open" dialog.
However, a letter drafted by the franchisees, of 11 April, shows the deterioration of relations. "Many of you have said do not feel that the senior management of the chain does not understand the economic pressures we face," says the letter.
Conflicts. This is not the first time that the largest chain of coffee shops in the world comes into conflict with the franchisees. In 1990, the network sold a large number of franchises in the United States, cannibalizing the existing partners. said Dick Adams, a former McDonald's store and consultant in San Diego, California.
Pressed by the franchise, the company applied the expansion. In 1998, she opened 1,130 new snack bars; in 1998 the number was reduced to 92. "It was the time when the morale of franchisees was low and all felt extremely upset," said Adams. "We are in the same situation now".
Today, the tension between the chain based in Oak Brook, Illinois, and operators of their stores coincides with the company's struggle to grow amid signs still doubtful about the economic acceleration of the United States. On July 22, the company's shares fell 2.7%, the sharpest in nine months, when the second-quarter revenue and profits were below analysts ' forecasts. The network's CEO, Don Thompson, said that the economic weakness will affect the results of the year as a whole.
Most of the revenue generated by McDonald 's, which outsources the management of most of its coffee shops in the United States, came of their franchise. The recipe of the relief, which includes rent and royalties, increased 8% per year, on average over the past five years, while the revenues from stores rose 4%. Individual sales of snack bars of the network in the United States come to $ 2.5 million per year, the market research firm Technomic Inc..