Unhappy Meals

  • Share
  • Read Later
CHICAGO: More evidence of franchise discontent came as McDonald's scrapped its plan to promise customers 'Oops' coupons for free sandwiches if orders aren't ready in 55 seconds. The decision came after franchise owners said the plan would be a losing proposition and voted against it. The news is part of continued displeasure at the company's "Campaign 55" promotion that also offered Big Mac sandwiches for 55 cents if you also buy fries and a drink. Many restaurant owners say that initiative hasn't worked, charging that sales were down for the first three weeks of May. Although McDonald's chairman Jack Greenberg dismisses stories of franchisee unrest as "a guy with a fax machine and eight guys with lawsuits," the corporation has found relations with local operators increasingly hard to digest. The company that used to closely follow founder Ray Kroc's dictum that McDonald's would only be as successful as the local restaurant owner is now oriented to pleasing the stockholder, often at the expense of the franchisee. McDonald's has pushed hard to increase the number of stores on the theory that the company would collect more royalties based on increased overall sales. The price for franchisees has been a cannibalization and revenue decline in existing stores when new stores are built nearby. Greenberg counters that demand for new restaurants among existing franchisees remains strong, and that McDonald's program for compensating for the impact of new outlets is so exemplary that the state of Iowa adopted it as the model for new franchisee protection legislation.