The performance of McDonald’s Corporation (NYSE:MCD) is at an all time low because of upset Franchisees that account for 90% of fast food business in various locations.
In a recent opinion survey conducted by Mark Kalinowski, an analyst at Janney Capital Markets, stated that most of the Franchise owners gave poor and fair rating for the business prospects. This indicates lowest score of 1.81 on a Kalinowski’s scale of 5 (maximum). It is the worst performance of the company over the last 11 years.
The opinion poll included views of about 25 franchisees that command 215 restaurants overall.
What Are The Factors That Dragged The Business Into Negative Outlook?
Changes introduced by the new Chief Executive Officer, Steve Easterbrook, have upset Franchisees. He has staged a decision to increase wages of employees at company-owned restaurants. Further to that he also made innovations in the menu by incorporating a premium burger and chicken, which is antibiotic free, while eliminating some items.
The new CEO also made renovated restaurants with digital sign boards give a fresh life to the business.
According to Franchisees, the recent wage hike will pressurize them to increase wages in the restaurants owned by them too.
According to one franchisee, the company did not consult the franchisees while hiking wages. It has resulted in a fractured relationship between the franchisees and the company.
According to McDonald’s Corporation (NYSE:MCD), the above views are based on the opinion of just 1% of the total 3,100 franchisees. It further stated that feedback of franchisees are considered in strategic decisions and maintains the same cordial relationship with them.
Easterbrook Is Ambitious To Bring Mcdonald’s Into Profit
The main aim of new CEO is to keep the company flourishing. According franchisees, they are still confused about the new strategy. They accuse the company that it has no plan or strategy to move the business forward. They further said the company is only considering the interests of stakeholders. Franchisees feel they could not afford the proposed changes.
Meanwhile, the company sales have declined by 2%.
