McDonald's franchisees are furious with the fast food company for hindering their ability to operate a chain by increasing the costs of rent, remodeling and fees for training and software, according to Bloomberg News.
Franchisees run about 90 percent of the fast food chains more than 14,100 U.S. locations. Raising costs is making it increasingly difficult for new restaurants to open or for restaurants to make renovations.
"[McDonald's is] doing everything they can to shift costs to operators," Kathryn Slater-Carter, who in June joined other franchisees in Stockton, California, to brainstorm ways of getting the chain to lessen the cost burden, told Bloomberg News. "Putting too much focus on Wall Street is not a good thing in the long run... It is not as profitable a business as it used to be."
According to Bloomberg News, the Big Mac seller has increased their rent and royalties by 8 percent on average during the past five years. However, profit revenue rose 4 percent within the last five years.
There are franchisees who are paying 12 percent of store sales in rent, according to Bloomberg News. U.S. McDonald's restaurants average about $2.5 million in annual sales, according to Chicago-based researcher Technomic Inc.
These numbers show "franchisees that have recently renewed leases are paying an average of $300,000 a year, up from $212,500 at the 8.5 percent rate," according to Bloomberg News.
"What I see going wrong is the corporation itself is forgetting that its fiscal strength rides on the fiscal strength and the creativity of the operators, and it's just going for such centralized control," said Slater-Carter, whose family has owned McDonald's franchises since 1971.4
Heather Oldani, a spokeswoman of the franchisees, released the following statement about McDonald's increasing costs:
''We are continuing to work together with McDonald's owner/operators and our supplier partners to ensure that our restaurants are providing a great experience to our customers, which involves investments in training and technology."
To read the full Bloomberg story, click here.
*Edits were made to this article.
