McDonald's employees are annoyed by the corporation's move to increase costs for franchisees to operate their restaurants potentially limiting the possibility of new stores opening and further decreasing sales, Bloomberg reported.
The company made the move to pay rent, fund remodeling costs, and fees for training and software in 90 percent of the chain's 14,100 locations throughout the country.
McDonald's is "doing everything they can to shift costs to operators," Franchisee Kathryn Slater-Carter told Bloomberg. "It is not as profitable a business as it used to be."
According to Bloomberg, Slater-Carter, who has been an owner of McDonald's franchises since 1971, was told to pay $80 a year to switch to the corporation's e-mail system, and she has now found herself contributing an additional $10,400 a year for software, Wi-Fi, and costs to train employees over the past five years from extra costs added on by corporate.
"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," she said.
McDonald's spokeswoman Heather Oldani told Bloomberg that the company is coming up with a solution.
"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," she said.
According to Oldani, remodeling a McDonald's restaurant is an average of about $600,000, with construction of a new store totaling $1 million.
The conflict comes after shares dropped 2.7 percent in the second quarter on July 22; the biggest dip for the corporation in the last nine months. The decrease also trailed analysts' predictions, after consistently rising over the past three months. There was also a halt in the unemployment rate at 7.4 percent or greater according to Bloomberg.
"Across the country, the rent owner/operators pay for their McDonald's restaurants is determined by local market real estate costs, as well as the cost of doing business in a particular market," McDonald's spokesman Ofelia Casillas told Bloomberg in a statement. "The range for rent has historically varied based on these and other regular business variables."
