a repost from a comment i made in response to an article on blue mau mau on the trend of larger franchisees displacing small one:look into what mcdonald's did in puerto rico. sold the entire market to arcos dorados as a master franchisee. arcos will not buy nor allow the sale of any franchisee locations and has dissolved the local marketing coop. They purchased the entire McOpCo base which represents more than 60% of the locations on the island and a heavy concentration in the metropolitan areas. with the marketing coop dissolved and rights to approve/disapprove marketing materials (supposedly to protect the brand/image but being used as a mechanism to stifle competition from their own subfranchisees). FTC claims have been made but nothing has moved forward, Local Puerto Rico specific laws are the only thing keeping Arcos from closing down all of the existing (now sub)-franchisees Federal laws did absolutly nothing to protect this from happening. Every O/O here sign EXACTLY the same UFOC and contracts that were signed on the mainland. Hispanic leadership has turned their back, Oakbrook has turn their back, No Ombudsman process nothing... simply watch the time expire on your contracts while we make every marketing and purchasing decision that suits our needs especially if it is contrary to yours... open a restaurant 3 miles away... yup! Set "national" campaign prices with 40% food cost on an island where our labor is 25% and utilities can be over 10% ensuring that there is no profit... absolutly! changing suppliers like McCain for an inferior cheaper french fry from an unapproved supplier... sure! Doing everything to try and catch franchisees in breach including sending out field consultants to check if they are selling MEGAMAC (4 patty bigmac) without paying into a "national campaign" they created with zero input or vote and then sending cease and desist letters for essential honoring a "grill order"... Of couse! Extending leases on restaurants that are absolutly unprofitable to avoid closing non performing location because they have a target number of opens they must meet as an MFA even if it means you loose thousands of dollars monthly... definetly. This is absolute abuse and I dont know why franchisees on the mainland bury their head about this situation when it absolutly could happen to them.
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