McDonald's franchise owners are mobilizing against corporate.
According to Bloomberg News, the franchises, who operate 90 percent of McDonald's restaurants, believe the company is charging too much rent, remodeling and fees for training.
The franchises told Leslie Patton at Bloomberg News, they're currently paying up to 12 percent of store sales in rent and are asking the company to return to its historic rate of 8.5 percent.
The franchises held meetings to discuss ways to get the company to bring costs down. The higher costs mean franchises are less likely to open new restaurants and refurbish them, potentially constraining sales.
"It is not as profitable a business as it used to be," Kathryn Slater-Carter, who owns two McDonald's stores, told Bloomberg News. Carter said she backs the California legislation that would require good faith and fair dealing between parities in a franchise contract. According to Bloomberg News, it would also allow franchises to associate freely with fellow store owners.
"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 investment in training and technology," McDonald's told Bloomberg News.
Cooperation between McDonald's and its store owners is deteriorating, according to an April 11 letter from a franchisee to other store owners obtained by Bloomberg News.
"Many of you have said you don't feel that the top management understands the economic pressures that we face," the letter said. "The tone has become much more controlling and less inclusive."
Opening a restaurant is hard for the average American. According to the website, McDonald's usually requires "$750,000 of non-borrowed personal resources" before considering an application.
The franchise controversy is just another problem added to the growing list for the corporation. Last week, employees went on strike for higher wages.
