McDonald’s U.S. Operators Vote to Snub Corporate Over Millions in Fees

95% of all McDonald's U.S. operators voted to halt nonessential meetings with the corporate team on Monday, according to a memo from the National Franchisee Leadership Alliance obtained by Business Insider,

The decision sends a message to the McDonald's corporate team to expect the silent treatment until they address several franchisee concerns over new operator fees, the memo states.

Despite giving just 48 hours of notice, a whopping 1,800 McDonald’s operators joined the call. Operators told Business Insider that it is rare for franchisees to come together and rally against corporate practices in such an organized manner.

Of course, this decision didn’t come out of nowhere. It has been a particularly tumultuous month when it comes to the McDonald’s franchisee-corporate relationship. Recently, franchisees expressed their concern as McDonald's prepared to end a monthly Happy Meal subsidy it pays to franchisees, collect monthly fees for technology investments and offload employee development costs to franchisees.

Franchisees told Restaurant Business that these changes could cost operators $170 million in 2021, or roughly $12,000 per location. Even prior to that, McDonald’s was in hot water amid reports of discrimination by franchisees and the former CEO’s sexual misconduct lawsuits.

"The company acknowledges the situation and will continue to make every effort to engage franchisees so that together we can effectively operate our business," the chain told Business Insider.

On the consumer side of things, McDonald’s franchisees have actually seen significant sales gains in 2020 as opposed to the massive losses seen by many other foodservice brands. This is largely thanks to the brand’s robust drive-thru, digital and delivery business and viral celebrity-branded meals. Plus, the corporate team invested $100 million in marketing efforts.

Still, this unprecedented decision to temporarily end all nonessential communication with the corporate team shows that operators have bigger concerns than just sales. In the world of franchising, especially with a brand as big as McDonald’s and in an industry as fragile as the pandemic-plagued restaurant segment, franchisees will not accept feeling as though they are being ignored.