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McDonald’s operators move to form franchisee association McDonald's

McDonald’s operators move to form franchisee association

The group seeks more control over menu pricing amid heavy discounting

Following a first-of-its kind gathering of more than 400 U.S.-based McDonald’s franchisees last week, a group of operators moved one step closer to forming a self-funded alliance to represent their interests with the Chicago-based company.

The group, called the National Owners Association, is an “owners advocacy group” that aims to “work with McDonald’s to positively impact the system,” according to its website.

Hundreds of McDonald’s operators gathered in Tampa, Fla., last week where, according to the association’s website, attendees gave a “resounding yes” to the prospect of a self-funded franchisee group. Another meeting is set for Dec. 12 in Dallas, the website says.

The effort is being spearheaded by third-generation owner-operator Blake Casper. On Monday, Oct. 15, Casper posted an introductory blog post to the alliance’s new website calling for franchisees to retain more control of menu pricing.

“We have all witnessed the control shift from local to national in the last two years. The corporation’s strategy to nationalize all aspects of our business,” he wrote. “Our ability to price our menu boards may be one of the last controls we still have.”

Representatives for the National Owners Association could not be reached for additional comment.

“We always welcome and are committed to a constructive, collaborative dialogue with our franchisees.” McDonald’s Corp. said Monday in a statement. “We will continue to work closely with our franchisees so they have the support they need to run great restaurants and provide great quality experiences and convenience for guests."

Mark Kalinowski of Kalinowski Equity Research first reported in late September about the group’s planned meeting in Tampa. If the group formalizes, he said it would be the first time in McDonald’s history in the U.S. that a group of operators created an operator association.

Kalinowski said the main point of contention for franchisees is aggressive discounting to boost traffic.

“You have an industry environment that is very challenging right now,” he said. Consumers are demanding discounts.”

For a franchisee, “that’s not great for your business, your profits and cash flow” he added.

Yet, CEO Steve Easterbrook said restaurants will push more value offers — with the backing of franchisees.

“Operators are consolidated and behind that decision because they want to grow guest counts. We’re going to keep pushing on, and pushing hard,” he said during the July second-quarter earnings call.

Kalinowski noted that if McDonald’s is going to listen to any official group, one led by Casper should grab their attention. The Casper family operates more than 50 restaurants and they represent a “big voice” among all the franchisees in the U.S.

“When Caspers Company speaks, they are to be taken seriously,” Kalinowski wrote in his Sept. 27 report.

Contact Nancy Luna at [email protected] 

Follow her on Twitter: @FastFoodMaven

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