McDonald's Franchisees Furious Over the High Costs of Restaurant Operations
McDonald's franchisees are furious over how much it cost just to operate a restaurant, and are joining together to try and fight back.
90 percent of all McDonald's restaurants are operated by franchisees, and they are having trouble paying rent, remodeling, and training people because of the high prices, according to Bloomberg News.
A franchise owner told Bloomberg News that franchising, "is not as profitable business as it used to be." The unnamed source also said owners have been holding "rogue" meetings to discuss how they can get the corporation to bring costs down.
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New franchises are not likely to open up because the cost of refurbishing is too great, Bloomberg news reported. Also, according to Yahoo, 12 percent of sales goes to rent, and the owners are asking it to be returned to the "historic rate" of 8.5 percent.
"[Headquarters said] continuing to work together with McDonald's owner/operators and our supplier partners to ensure that our restaurants are providing a great experience to our customers, which involves investments in training and technology," McDonald's told Bloomberg.
To open a franchise an owner needs $750,000 of their own personal resources to be considered. Similarly, Taco Bell requires $1 million while Burger King needs $1.5 million, according to their websites.
Another controversy regarding McDonald's sees a woman suing a franchise for the company paying their employees with debit cards, according to the Associated Press.
The owner of 16 Pennsylvania restaurants says the lawsuit has no merit because all employees consented to the method of payment upon working there.
The issue came about after a woman became upset she was charged $1.50 for withdrawing cash from the debit card. Her former employer said this was false because she was never paid with a card.
