Major Changes to McDonald’s Franchise System Rejected

A group representing McDonald’s (NYSE:MCD) owners said the company rejected its request to delay changes to franchising policies, including updated standards and adjustments to how the company evaluates potential new restaurant operators.

The National Franchisee Leadership Alliance said in a letter to owners Wednesday that McDonald’s denied its request to make the changes in June 2023 instead of Jan. 1.

The leadership group represents McDonald’s owners across the country. As of the end of last year, according to the company, there there were more than 2,400 franchise owners. Franchisees run some 95% of McDonald’s locations.

The company declined to comment on the changes or the NFLA’s letter and its request to delay the adjustments.

McDonald’s unveiled new policy changes during the summer, sparking tensions between some operators and the company. Several owners unhappy with these changes expressed a lack of confidence in the company’s CEO, Chris Kempczinski and its U.S. president, Joe Erlinger, in a poll taken by a separate group, the National Owners Association.

The NFLA is seeking more clarity and education from the company on what it calls “McDonald’s Values,” as it pushes to hold franchise owners accountable for how they represent the brand online and in person.

McDonald’s says its values are: “Serve, Inclusion, Integrity, Community and Family,” and the update is meant to reflect how these should be incorporated into owner and operator standards.

MCD shares slumped $2.17 to $234.77.