March 27, 2017

Can Oak Brook Levy Fines On McDonald's Operators?

Ninety-five percent of the time McDonald's Corp. gets its way with McDonald's operators  
through "bluffing". 

As we've discussed many times OPNAD is the biggest bluff concerning McDonald's USA. 
Another bluff concerns constant reinvestments. Most of corporate's methods concerning 
food safety are a bluff (more on that later).

But the worst kind of bluff is forcing operators to do something that has no foundation in 
the contractual relationship, but I already mentioned OPNAD.

The latest example has to do with the "Hardware Modernization Program".

As with most of McDonald's Corp. vendor relationship there is endless opportunity for graft 
and corruption between McDonald's, their executives, the vendor, the vendor's people, and 
the finance company.

But what really caught my attention is the statement that says, "If an owner/operator 
declines to participate a $1,000.00/month ongoing penalty will be assessed". 

Maybe every McDonald's operator in the country recently signed new, revised, franchise 
agreements with McDonald's and I missed it. How does anyone have the contractual power
to levy fines on McDonald's Operators for not going along with an Oak brook program?

Where is that in your franchise agreement?

Does the NLC suddenly have to power to levy fines? 

Like all arrangements between McDonald's and the vendors everyone benefits but the Operator. 

And there's another concern, the McDonald's employees who came up with this assessment 
may know nothing about the McDonald's franchise or contracts. Since McDonald's is now 
run by people who know nothing about restaurant operations they apparently also know nothing about franchising.

McDonald's Operators should not be "bluffed" into spending money just because a McDonald's corporate employee says, "Write us a check".

Maybe I just need to be educated on these changes but until I am I'll remain shocked at the 
audacity of McDonald's Corporation.


Anonymous said...

If the "penalty" is a mandatory assessment then it is a franchise fee that was not disclosed in the FDD.

Colossally stupid on MCD's part because that is really the ONLY way for a franchisor to get into trouble in states without franchise relationship legislation. Somebody will get fired over this.

Anonymous said...

The NLC is a bunch of useless hacks who rubber stamp whatever Corp wants. Disband them.

Richard Adams said...

Nobody's going to get fired for this - but they might receive the President's Award for having the idea.

Anonymous said...


Anonymous said...

The NLC is corrupt. Need proof ?? Raleigh Region NLC richards sold out his operators and was rewarded with seven McOpCo stores.

Anonymous said...

We need an INDEPENDENT o/O association. The NLC is INEPT

Anonymous said...

Make that 10,000 (1 of the suits said this would help with bottom line and we could add to G+A at the same time

Another profit maker would be 1,000 fine each month a restaurant does not achive a 65 or better on monthly VOICE scores.
I already have 2 of the new policies and it only took a minute or two. Just think of all the GREAT money makers coming to the
MCD share holders



Richard had some excellant points in his post THANKS

Anonymous said...

The NLC - Susan Singleton & OpNad - Travis Heriaud sound more like Corp. employees rather than representives of the Operators. We have not heard about any pushback on anything.

All the Things Presented at the Gallery walk they just Loved.

I am looking for People to repsent my interests - NOT fellow Operators that want to be Corp. Employees.

Anonymous said...

great job Richard

MCD could mandate that there will be a 100.00 penalty for every complaint but to be fair and MODERN and PROGRESSIVE they
will give us 5.00 for every praise. That would only be right.

Stay tuned it could get ugly

Thanks Richard for the info. and giving us an opportunity to vent.

RALEIGH must be an interesting place with this operator acquiring 7 stores. MODERN and PROGRESSIVE

SHARING THE DREAM as mentioned above.

Anonymous said...

Get on the train it has left the station or get out of the system that is the way it is going be. It is going to be fun to watch some of these big franchisees take a tumble when we hit a bump in the road. If you ever notice at meetings none of these 20+ restaurant operators ever speak up. McDonald's Corp down the road is going to see some of these big poster boy operators go bankrupt.

Richard Adams said...

Historically it's always been easy to assist or to find a buyer for a small Operator who gets in trouble without going through a bankruptcy. With corporate sending all the cash to shareholders and a smaller McOpCo base there will no resources available to help to the larger Operators who get in trouble. Where's their buyer going to come from?

Anonymous said...

The Dunkin operators had a similar problem it hits corporate fining operators for being "out of compliance" with the corportae's new orders. Their independent operators association got the whole management team fired. I can't see NLC ever manning up to come close to that. Time for a change.

Richard Adams said...

If there were ever to be litigation on such an issue the NLC leadership would make great witnesses - for the corp.

Anonymous said...

Never let intimidation stray you in the wrong direction - David vs. Goliath

Anonymous said...

Can you say "Operator Traitor" ? I knew you could !