McDonald’s Makes Owning and Keeping a Franchise Harder, Will Now Factor in Customer Complaints

Richmond - Circa April 2022: McDonald's Restaurant.
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McDonald’s executives recently informed the chain’s franchisees that they will be required to undergo a rigorous review process every 20 years to keep their restaurants, according to an email to franchisees viewed by The Wall Street Journal. The burger chain will also now consider additional factors, such as customer complaints, to determine which franchisees can add new locations.

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The WSJ added that McDonald’s would also require franchisee heirs to put up more cash to continue operations and designate a single family member as the operator. Currently, several heirs can take over a McDonald’s location. McDonald’s plans to implement the franchising changes in Jan. 2023 — these changes will affect 95% of U.S. company restaurants.

“We’ve been doing a lot of thinking about how we continue to attract and retain the industry’s best owner/operators — individuals who represent the diverse communities we serve, bring a growth mindset and focus on executional excellence, while cultivating a positive work environment for restaurant teams,” McDonald’s U.S. President Joe Erlinger said in a message to franchisees.

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Chain franchisees plan to meet with company executives this week, and the WSJ reports that some owners plan to push back against these changes.

Critics have claimed that McDonald’s hasn’t done enough to recruit members of minority communities into restaurant ownership. Last year, the chain pledged to commit $250 million in low-interest loans to new U.S. franchisees over the next five years to help increase diverse ownership, the WSJ added.

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To operate a traditional McDonald’s franchise, initial investments range from $1,366,000 to $2,450,000, including a starting franchise fee of $45,000.

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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