McDonald’s wants to tighten franchise rules, and restaurant owners are not lovin’ it

McDonald's is facing a new lawsuit from its franchisees over the company's recent changes to its business model.

McDonald’s wants to tighten franchise rules, and restaurant owners are not lovin’ it

In the land of Ronald McDonald, it's no longer all about happy meals.

Restaurant owners are fighting back against McDonald's recent attempts to extend greater control over franchisees, while refusing to accept certain "joint-employer" obligations.

Marcus Samuelsson in New York City restaurants

"We want to be independent." In a statement issued on April, the National Owner's Association, a group that represents over 1,000 McDonald's owners in the US, said: "If McDonald's doesn't want to be a joint employer, they must stop acting as one." 19.

In June of last year, the fast-food chain announced that it would tighten the rules for franchising in the US. Approximately 95% stores are run by independent owners. Changes included a new rating system, more frequent checks, and a revamped way of granting 20-year licenses.

Restaurant owners expressed concern that the new performance standards would increase pressure on employees and operations. National Franchisee Leadership Alliance (another group of US McDonald's operators) asked for the new rules to be delayed until June 2023 instead of January 1. McDonald's refused the request.

NOA encouraged members to contact the US Federal Trade Commission in March to express their concerns regarding McDonald's franchise rules.

Not all franchisees are against the new policy. In a joint statement, ten franchisee advisory councils called NOA out: "We are disappointed that this small but vocal group pushes a counterproductive agenda which threatens the business model of our franchisees and their future livelihoods."

McDonald's is extending more control to its franchisees. It also denies that it's "joint employers", absolving it from a lot of legal liability for franchise owners' acts. This assertion is supported by law.

McDonald's is not responsible for any labor violations that occur at its franchises, according to the National Labor Relations Board. This decision was made after one of the largest cases in NLRB's history.

In 2012, franchise workers complained to the NLRB that they had been fired because of their union organizing activities. McDonald's claimed it wasn't liable, because it couldn't be considered a joint employer. This definition was expanded by the Obama administration in 2015. This pro-worker measure was designed to hold corporate owners responsible for labor practices in franchises and required them to engage in union negotiations.

In 2018, the joint employer threshold was reduced under Trump's administration, a win for corporate owners. In 2019, the NLRB ruled that McDonald's was not responsible for unfair employment practices in independently-run restaurants and could settle their dispute with franchise employees. In 2021, the Fast Food Workers Committee filed an appeal against the ruling. However, the settlement was confirmed in April 2022. McDonald's is not responsible for the use of child labour at any franchise.

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