McDonald's Franchising Policy Focuses on Diversity Metrics

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McDonald’s is altering its franchising policy which it grants franchises to attract applicants from a wider range of backgrounds. This is the most recent change in McDonald’s management’s approach to overseeing its franchisees. The global leader in fast food will begin conducting fair assessments of all prospective new operators beginning in 2023. In the past, active franchisees’ spouses and children have been given preference over other applicants for certain positions.

McDonald’s United States President Joe Erlinger stated that the company has been thinking a lot about how it will continue to attract and retain the industry’s best owner/operators. These individuals represent the diverse communities they serve, bring a growth mindset, and focus on execution excellence while cultivating a positive work environment for restaurant teams.

McDonald’s will also divide the process by which it renews the 20-year agreements it has with its franchisees from the procedure by which it determines whether or not the franchisee can operate additional stores. Erlinger assured franchisees in the United States that the company will more explicitly include its core principles in its requirements for franchisees.

Recent events have resulted in the corporation receiving criticism for its intention to implement a new grading system at the beginning of the following year. This plan has infuriated some franchisees, who are worried that it may alienate their employees. Around 13,000 McDonald’s restaurants are franchised across the United States. According to Restaurant Business Online, over 1,750 sites were sold over the previous year due to the decision made by certain operators to leave the franchise.

McDonald’s committed in December to increasing the number of franchisees it recruits from diverse backgrounds. As part of McDonald’s revised franchising policy, the fast-food giant would invest $250 million over the next five years to assist qualified candidates in financing a franchise. It’s all a part of the firm’s larger effort to welcome diversity at every level. In recent years, black current and former franchisees have filed lawsuits against the chain, saying they were subjected to racial discrimination. One of the lawsuits was thrown out, while the other led to McDonald’s paying out a settlement of $33.5 million to the plaintiff.

Late in May, most of the company’s shareholders cast their votes in favor of an independent civil rights audit. The corporation stated that it had contracted with a third party to conduct a diversity assessment; nevertheless, the proposal did not carry any legal weight.