McDonald's tightens renewal standards for franchises

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Brian Lutz
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McDonald's tightens renewal standards for franchises

Post by Brian Lutz »

https://www.restaurantbusinessonline.co ... -standards

McDonald's is making changes to the way franchise agreements are renewed, essentially requiring operators to reapply at the end of a 20 year term, and separating the application process to open new restaurants from the renewal process. The move seems to be aimed largely at longtime operators, where much of the recent pushback to corporate policies has come from.
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Re: McDonald's tightens renewal standards for franchises

Post by storewanderer »

Brian Lutz wrote: June 24th, 2022, 4:09 pm https://www.restaurantbusinessonline.co ... -standards

McDonald's is making changes to the way franchise agreements are renewed, essentially requiring operators to reapply at the end of a 20 year term, and separating the application process to open new restaurants from the renewal process. The move seems to be aimed largely at longtime operators, where much of the recent pushback to corporate policies has come from.
I wonder if the corporation makes more money when they "renew" a franchise or kick out the franchisee and sign up a new franchisee for the same location...

McDonalds made this bed for itself by getting rid of so many corporate locations over the years. If they wanted more control over operations, they should have kept more corporate locations.

Also I am not sure bringing in a bunch of new franchisees will reverse their problems. Look at how chains like Subway, Quiznos, etc. have done with "new franchisees." It just spirals the locations down even worse.
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Re: McDonald's tightens renewal standards for franchises

Post by storewanderer »

I think this is already starting to have an effect. I was near a McDonalds tonight that has basically had its inside 100% closed for the past 2+ years. Even before COVID, they would often close inside at 6 PM or 7 PM. Franchisee's office used to be good on lip service but nothing would ever change. Then when COVID happened they blamed staffing shortage as the reason for it not being open inside. Then they started to open at lunch but even that was not consistent. It is a lower volume location but pretty small so it seems to work for McDonalds to keep it open.

I had noticed a couple times in the past week when I was in the parking lot around 6 PM or 7 PM that lights inside were all on, which was odd, since before they were shut off.

But tonight there was a table of people sitting inside the location eating food so I was surprised to see it open inside. About 10 minutes later I took another look and another few people had parked and gone inside as well. So it does seem people want to eat at these places if they will open up.
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Re: McDonald's tightens renewal standards for franchises

Post by storewanderer »

Looks like McDonalds corporate is buying 60 franchised stores.

https://www.qsrweb.com/news/longtime-mc ... ls-stores/

This should be the first of many blocks of franchise stores that McDonalds corporate takes over........
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