Coalition of Franchisee Associations

May 10, 2021

NOA on Employment and Inflation

 McDonald's franchisees and hiring challenges


Anonymous said...

Bravo to the NOA for getting involved with this. But the thousand dollar question is “where is the NFLA on this?’ Have they bee muzzled by Corp again?

Anonymous said...

Dear Fellow NOA Members,

It was a busy week at McDonald’s, our hometown. Staffing continues to be a challenge. We wrote last about the perverse effects of the current unemployment benefits. We are seeing the evidence across the country. At the same time 14m Americans are unemployed, millions of jobs go unfilled. In fact yesterday the country only created 266k jobs, less than a third of expectations. What’s going on here? When people can make more staying at home than going to work, they will stay at home. It’s that simple. We don’t blame them. We fault the system. Employers are offering higher wages, signing bonuses, incentives, anything to attract workers. All of which is good for the American Worker. We are glad for it, after all, the American Worker is our customer. The more money they have to spend, the better our sales. But something has gone off the rails here. When higher wages, signing bonuses, paid interviews no longer work, we have a problem. And even if they do (which the jobs figure showed they aren’t), who will pay for these.
Inflation is the flip side to all of these changes. Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive. Our government officials need to know what is happening out in the real world. They need to know what they are creating; an inflationary time bomb.
Now the winning strategy is simply being open and giving fast service. Our competitors are literally not open due to staffing shortages. If our stores are staffed, and running well, price is no longer an issue. It’s clearly not the customers focus. We have no idea how long this will last, but for now, we need to do whatever it takes to staff our restaurants and then charge for it.

Staffing our restaurants has been all consuming and it’s taken most of our focus. It should. It’s how we will win in the marketplace. It would be nice if our franchisor was focused on this. Instead, they announced last week they will be restarting unannounced ecosure visits. This is on top of the fact that the safety and security visits are the first time we have seen our company counter parts in our restaurants for over a year. Chasing our OA’s around our restaurants is no way to help us. Debating whether a fire extinguisher is or isn’t 50 feet from a stock room, does nothing for our customers. The added stress to our management teams can not be overstated, and it’s our managers we are losing the most. It shouldn’t come as a surprise. We have the most invested into our managers and they are terrific. Other employers would love to have them. Our managers bear the brunt of these unnecessary visits. We have not seen an increase in Health Inspection failures across the country to warrant these unannounced visits. And the idea that this will stop the trumped up SEIU lawsuits claiming we aren’t protecting our people is nonsense. Bureaucratic red tape never helps and we can’t afford it during a staffing crisis.

McDonald’s holds its Annual Shareholders Meeting on May 20. It will be a virtual affair, so we can all tune in. As large McDonald’s stakeholders and increasingly larger shareholders, we should. The election of the board will be concluded at the meeting. While the NOA has not proposed voting recommendations, the leading Corporate Governance firm Glass Lewis has. You can read these report recommendations. In short, they are not recommending the re-election of Chairman Hernandez or Compensation Chair Richard Lenny. Glass Lewis contends that these two directors should be held accountable for the handling of the Steve Easterbrook’s termination and his severance pay. We are all for the accountability piece, we just think it should be in regards to the hiring of Steve Easterbrook in the first place. McDonald’s deserves better leadership.

Your NOA Board.

Anonymous said...

Why was most of the paragraph on EVP left off this post?
Owner/Operators do not fall into the next trap set by McDonald's Corporation with EVP, just like BBV2020.
Very concerned Owner/Operator

Richard Adams said...

That letter was submitted by an anonymous person who apparently chose to do some editing. I superficially compared it to the official NOA letter but didn't go over every sentence.

But please remember, this website is not a NOA website and while we fully support the activities of an independent franchisee association this website doesn't speak for anyone or any other organization.

If anyone wants to comment on any McDonald's corporate initiative please type away!
A hint - go easy on the acronyms and some of the terminology. Don't assume that everyone who reads your comment understands your internal language.

Richard Adams said...

Previous comment ... "Bravo to the NOA for getting involved with this. But the thousand dollar question is “where is the NFLA on this?’ Have they bee muzzled by Corp again?"

As a public company McDonald's management seeks to control what shareholders know about the company. While they are required to comment on some risks they will downplay others. The fact that a workforce shortage may hinder same store sales increases would be such a topic.

Even though shareholders are constantly exposed to bad news about the labor market McDonald's management will tell them not to worry their pretty little heads.

Anonymous said...

The post was shortened because the website only allows a maximum of 4000 characters. Nothing nefarious.

Richard Adams said...

Thanks for the clarification.