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November 10, 2018

Papa John’s Franchisees Lawyer Up

Papa John’s franchisees hire a high-powered attorney
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22 comments:

Anonymous said...

HOPE the NOA does the same!

Anonymous said...

Has the company made any statement at all?

Anonymous said...

Their non-response is expected. They have unlimited access to lawyers that will keep them advised on whether or not to respond. Using other people’s money to “protect the brand” is the easiest way to impose their power in a legal/public platform. This means they will overwhelm opposing organizations/people by dragging letigation on forver and at all costs. They are paying high powered attorneys that charge around $1,200 an hour to make sure they can impose their will. (Based on information from the case in the Philadelphia/New Jersey area that involves MCD Corp.). In terms of mcd leadership and the integrity....all I can say is it is like if rats are guarding the cheese. There will be no fair assessment from any direction.

Anonymous said...

I believe you are correct in what you say. However, the Board of Directors has got to be concerned about how this will impact the stock price and image. It's not like we are a few discontented operators that have no real knowledge of the business. If we become 1000 strong or more the board will be forced to examine company policy and managements heavy handed tactics. They are the only one's that can jerk Easterbrook and CK to attention. This very likely impact CK's bonus of $5,000,000.00 so between the operators and the BOD he has got to be thinking of his own situation just as we are.

Anonymous said...

Only the lawyers will make money representing the operator groups. The law and "deck" is stacked against the franchisee. One thing I learned a long time ago was that the Corporation has a lot more money than any operator or group of operators to pay lawyers to represent them in any claim or suit. Time is on their side, not the operator's. Good luck, but you're p*ss*ng in the wind!

Anonymous said...

You're not P*ss*ng in the wind when you stand to be right. If you are right but weak, then you will crumble. If you are right and not back down 1000 strong you will overcome wrong.

Anonymous said...

It is important that this not become a bitching session between the company and the operators. The operators want as much as anyone for the system to be successful. However, the lines of communication over recent years has become non existant causing confusion, a serious decline in trust as well as financial loss and negative cash flow in order to cooperate with the company in achieving common goals. The worse thing that could happen would be to allow the lawyers to dominate the communication. No one I know wants that to happen. No one I know wants this to get into court. The company has effectively cut off all constructive communication with the operators. Their policy seems to be "one size fits all" and "our way or the highway" both approaches are wrong. We all understand that the company has the upper hand by way of the licence agreement but as a factual matter we need each other. It is not now working. The more the company threatens "no growth" and other things the less valuable the stores become because who wants to grow and do business in these circumstances.

Anonymous said...

If the BOD needs to hear from Operators, how does that happen? If they see that we have created an association, how does leadership deny there is an issue?

Anonymous said...

We as McDonald's Owners are not seeking to litigate, we are seeking for McDonald's to work constructively with their Franchisees. What that means is listening to our concerns and working proactively to improve the system for both parties. We are not seeking to run the McD. company. however, We are seeking BALANCE when it comes to: The Operating System, Communication with Company leadership, Timing of Construction objectives, Cash Flow and Improved Execution of many to the current initiatives Like: (Technology, Marketing, Decor and Training) just to name a few.

We need Legal Representation not to Litigate but to advise Us on the best course of action. To many times we as business people understand Teams, P&Ls and Running the business. The part we get tangled up in is not understanding how to use our collective power to express our collective concerns.

Anonymous said...

With cash flow and individual store profits on the decline and reinvestment into to their buildings and property constantly increasing year after year...why would anyone believe being a McDonald’s franchisee is a good financial investment both long and short term? Seems to me with the stock price at an all time high, a lot, if not all senior leadership with any amount of stock options will be cashing out and living the high life long before many operators will be able to get back their return on investment if at all. Cash out now while you still have equity.

Anonymous said...

Since the climate seems to have changed I will take a moment to chime in and remind everyone that 100% of the McD operators in Puerto Rico have been in a legal battle against McD Corp for 10+ years. McD sold all of their assets in PR to Arcos Dorados and cristened them master franchisee. Arcos Dorados then dissolved the local co-op, cancelled all effective rent arrangements and back dated the unmade payments to inflate the oparators debt, began running the marketing (including directly taking payments for campaigns) through their offices, Discontinued all rewrite policys and put operators on month to month contracts when leases expired (making financing impossible without long term contracts), excluded operators from new product launches by dictating to martin brower who could and could not receive new product, botched the walmart contract forcing all in store restaurants to close (heavily affecting operators over their own operations), have never offered any cost sharing for any remodel/equipment purchase, forced operators out of US IT support (still using pc-pos).

Before anyone thinks oh well thats just Puerto Rico, if you missed the news in the last year you would know Puerto Rico is part of the US. The franshisee agreements signed were the same as all of you signed and the UFOCs were the same.

Richard Adams said...

A franchisee association needs legal counsel. But, a focus on litigation is not healthy for the long-term success of the association. The possibility of litigation should always be in the association's quiver but as stated above, no one wants to see that happen.

As for the board of directors - the only way they will hear about the concerns of franchisees is from the franchisees. Management will tell them nothing but lies and they won't know if they can believe what they read in the press. They need to hear from the franchisees.

From above, "Only the lawyers will make money representing the operator groups. The law and "deck" is stacked against the franchisee." ... Because these comments are anonymous I never know if comments like this are sent in by some corporate puke at headquarters trying to dispirit Operators or if it's from an Operator who's afraid of their own shadow. Either way, ignore it.

Anonymous said...

From what I understand that Acros character is from Uruguay. The same country that the VP of franchising (Alvaro) is from. They both must be from the same mold. Take no prisoners type attitude! Throw rocks at tanks type people.

Richard Adams said...

You're right, Arcos Dorados is based in Montevideo. Interesting place to get your business experience.

https://www.arcosdorados.com/ir.html
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Anonymous said...

The NOA is already strong enough Tia Cheever its goals of it avoids mistakes. Hundreds of owners are members; that is more than enough to force change for the better.

Getting competent counsel that is aggressive (which is different than litigious) is critical. Especially when the inevitable offers come from management. They will offer puffs of smoke to quiet things down. A pause act will lead to half measures. Don't settle for less than what you need. MCD ultimately has no choice but to fix the problems as long as NOA keeps its members and stays aggressive about the terms that owners need.

Anonymous said...

As a factual matter the company has no legal obligation to respond at all. They can just ignore this like they have done regarding many issues. However, they did say that in 2019 their main focus will be operator cash flow which is in their benefit as much as ours. Our long history indicated that they will respond in a positive manner. However, recent history indicates that they will draw a line in the sand and declare war. If that happens what are we prepared to do? 1. Stay out of court. 2. Put all service fees in an escrow account. 3. Don't open the stores one week per month. It's a question that needs to be considered.

Anonymous said...

Again, no one I know wants litigation. There are important and expensive operational issues the operators have been begging for a solution, like technology. It's a joke. We have complained and given real working example to no avail. As a matter of fact they criticize us for complaining about it. There response is that we have a bad attitude and our complaints are inappropriate and too aggressive. This demonstrates how far the company has gotten from store operations. Since the operators have been so upset about it they seem determined to ignore it. This has been going on for several years. I remain, of the opinion, that the operators need to interface directly with the "Board of Directors". Those are the people that top management will listen to.

Anonymous said...

Here is a link to the McDonald’s Corporation Board of Directors as well as the other companies they all are associated with.....https://corporate.mcdonalds.com/corpmcd/investors-relations/board-of-directors.html

Anonymous said...

The stock is as high as I can remember. I'm sure this pleases the BOD and the investors. They are not going to want to do anything that may have a negative effect on the stock. If Easterbrook tells the BOD that they are going to help the operators with their cash flow in 2019 and they will settle down. So, just ignore them. That is what they will do.

Anonymous said...

Stock maybe at an all time high....but it is only that way based on the reinvestment money all of us as owner/operators have injected into their buildings with little to no return on those investments. Each member of the board of directors has a significant stake in the company’s which they are leaders of. As MCD “owners” we still have a significant impact in the communities that we do business in as it relates to relationships and influence. Might be a good time to start recommending our customers to stay away from spending their hard earned money on those businesses. In other words....recommend to whoever will listen to NOT do any type of business with their home company’s until things change for us.

Richard Adams said...

Gosh, that sounds complicated! How about establishing lines of communication between McDonald's Operators and the members of the board of directors? Remember, along with the operators the members of the board have a long-term interest in the McDonald's system. These corporate execs are only here for a few years.

How about communicating with the board instead of going to war with them?
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Anonymous said...

Last night I had a meeting with well connected individuals in MCD. They had some strong opinions about Chris K. and the Marketing lady. They said that Chris K is working hard to "learn the business" They said that he did not know or realize the difference between a franchisee and an employee!!! Amazing. The lady leading marketing should be fired and can't understand how she still has her job. They said to pay attention to how many times they use the term "LEARNINGS" which means most don't know anything about our business or what they are doing. It is unbelievable they could make Chris K President of MCD USA with him having so little knowledge about the MCD system. Easterbrook did a great job of flushing the toilets in the bureaucracy and he needs to do it again with the new top management.

Well said about working with the Board of Directors rather than fighting them. We can't win that one. They need to be informed about what is going on but with the stock at $186.00 they will be very cautious not to hurt that.