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September 29, 2020

Does Franchising Need More Regulation?

Calls grow for tighter franchise regulations
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7 comments:

Anonymous said...

Perfect example of franchisor abuses- being forced into BBV2020

Anonymous said...

Absolutely, the disguise of Ombudsman processes when there clearly lacks a financially viable legal recourse for franchisees is tantamount to mob tactics.

You cant ask for fairness as operators can't afford the legal cost to go against big brother individually. It's clear they are also unwilling, even as a group.

Anonymous said...

Not really we all willingly chose to sign the franchise agreement, sometimes you find out later how one-sided it is, who's fault is that?

Anonymous said...

Yes, we signed a one-sided franchise agreement, THAT IS NON-NEGOTIABLE.

If you are renewing or second generation and your family's whole net worth is tied up in the system, and you are a mere tenant on the real estate that you've poured millions of dollars into, you did not have a real choice to say "no, thanks." This is the whole point.You personally guaranteed it.

You can never get your day in court under the franchise agreement, no matter what MCD management (who has no personal wealth at stake whatsoever, BTW) does to you.

If you buy a car, there is a whole long list of laws to protect you, but if you buy franchise there is nothing, despite the potential loss of everything. Why is it more important to protect you from a high car repair bill versus losing your home, 401k, college fund etc?

Anonymous said...

When I got my first franchise agreement my dad caught me reading it, asked me what I was doing. Told him I'm reading the franchise agreement- seemed logical to do so.

He did this for 54 years, he said, "You're wasting your time- it's not negotiable. Just run your restaurant right, keep your head down and keep them away."

This was good advice and McDonald's was generally helpful over the years but when Chris K and the rest took the wheel everything changed- the Franchise Agreement was weaponized, regional leadership started planning who was going to grow, who was not and who they were getting rid of. That's when the wheels fell off, didn't matter if you were a good, great or awful O/O, all that mattered was whether they liked you and they liked you if you did what they told you to do- they loved and helped you grow if you stood up and advocated for them, if you recorded O/O only meetings and reported back to McDonald's employees who said what; if you sold out to them and their agenda you grew and quickly. If you did that you were given the inside track and they sometimes even shared their plans for other O/O's, who would survive and what would be for sale and what they wanted you to end up with. I know this because I saw it happen.

Regional leadership's agenda was driven by metrics that we didn't see and wasn't shared, 100% compliance in their region with every single initiative and they'd do or say anything to get 100% compliance.

Thank God the NOA was born, I'd probably be gone by now if we didn't do that because it changed everything. In reality it hasn't changed everything but at least they're pretending to care and less obsession with those metrics, regions seem to have more autonomy but I could be wrong.

This still won't work, we won't be at our best until we trust each other and we won't trust each other until their motivations are the same as ours, that they win/lose if we win/lose because top line sales will never be the same as bottom line profitability. There's a way but they're going to have to give up a quarter or a year or something but if they will do this we will all win in the long run.

It's just like politics- politicians make decisions to benefit them and that's in the short run, very few are running their offices to do the most good in the long run.

We are the only ones who who have to live for years with decisions made today. If we can fix that, if the company will start thinking and behaving like us we can fix all of this. It won't happen until their paychecks depend on what our paychecks depend on.

Anonymous said...

Base MCD managements pay on average unit level profitability. Everybody should win (assuming competent management).

MUCH more effective than having an operator on the board.

Anonymous said...

Federal law needs to resemble Wisconsin State law. Take a look sometime, it's almost impossible to lose your McDonald's franchise in that state. and rightfully so. They give you numerous times to "make it right" rather than 20 yrs and you're out.