McDonald’s franchisees may join together to push for changes

Business


In a rare step, a group of McDonald’s franchisees met Wednesday to voice concerns about changes they are being asked to make to improve sales growth at the hamburger chain, according to a media report.

Restaurant owners who attended the meeting told the Wall Street Journal they are pouring money into updating stores, adding touch-screen kiosks and refrigerators needed to serve fresh beef burgers, but those steps are not yielding results quick enough to offset the impact of their investments.

The paper reported about 400 franchisees attended the meeting in Tampa, Florida. The group, which represents a quarter of U.S. franchisees, is planning to form an independent operators’ association. The report said no formal vote on this action was taken or scheduled.

McDonald’s declined to comment on specifics of the report.

“We always welcome and are committed to a constructive, collaborative dialogue with our franchisees,” a McDonald’s spokeswoman told CNBC in an email. “We will continue to work closely with our franchisees so they have the support they need to run great restaurants and provide great quality experiences and convenience for guests.”

A McDonald’s spokeswoman told the Journal that renovated stores in the U.S. usually see a pick up in sales in a mid-single-digit percentage in the first year. The addition of self-order kiosks can boost sales by 1 percent to 2 percent, they said.

McDonald’s does share the cost of the upgrades with its restaurant operations.

McDonald’s efforts to revitalize the brand, which began more than a year ago, initially boosted performance, but sales growth cooled in the second quarter, with U.S. restaurants open at least a year growing 2.6 percent. That was short of the 3 percent growth analysts predicted, according to StreetAccount.

McDonald’s shares are down about 2 percent since the start of the year.

For more on the developments, read the full story in The Wall Street Journal.



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