McDonald’s simplifies franchising policies to attract more diverse candidates

The McDonald’s logo is seen at a restaurant in Arlington, Virginia on January 27, 2022.

Joshua Roberts | Reuters

McDonald’s is changing the way it awards franchisees in hopes of attracting more diverse candidates, the latest shakeup in how the burger chain manages to oversee its franchises.

From 2023, the fast-food giant will evaluate every potential new operator equally. In the past, preference has been given to the spouse and children of the current franchisee.

“We are thinking a lot about how we continue to attract and retain the industry’s best owner/operators – individuals who represent the diverse communities we serve, bring a growth mindset and We focus on execution excellence while cultivating a positive work environment. For restaurant teams,” McDonald’s US President Joe Erlinger said in a message to franchisees that was seen by CNBC.

McDonald’s will also separate the process through which it renews franchisees’ 20-year agreements from an assessment of whether franchisees can operate additional restaurants. Additionally, Erlinger told American franchisees that the company would incorporate its values ​​more clearly into its standards for franchisees.

McDonald’s declined to comment on the change to CNBC.

The company recently came under pressure for plans to introduce a new grading system early next year, which rankled some franchises who have concerns about potentially alienating workers.

McDonald’s has approximately 13,000 franchise locations in the United States. According to Restaurant Business Online, more than 1,750 locations were sold last year after some operators opted out of the franchise.

In December, McDonald’s promised to recruit more franchisees from various backgrounds, investing $250 million over the next five years to help those candidates finance a franchise. This is part of the company’s wider efforts to embrace diversity across all ranks of the company.

Black franchises, both current and former, have sued the series in recent years, alleging racial discrimination. One lawsuit was dismissed, while the other resulted in a $33.5 million settlement with McDonald’s.

A majority of the company’s shareholders voted in favor of an independent civil rights audit in late May. The offer was non-binding, but the company said it hired a third party to conduct a diversity assessment.


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