Franchisees for 226 U.S. stores have some scathing words for McDonald’s in the latest survey conducted by financial firm Nomura Holdings.
The survey, conducted by restaurant industry analyst Mark Kalinowski, found 29 franchisees in a state of gloom over the future of McDonald’s and its future. “We are in the throes of a deep depression, and nothing is changing,” said one franchisee. “They have thrown out many of the good people hoping for a Hail Mary. It will take a long time to overcome the arrogance of top management and the board.”
That kind of negativity may seem odd, given that the company’s share price has been rallying sharply since August (a period when most global stock markets went into an unholy funk), and hit an all-time high last week. The survey also represents a small portion of the over-29,540 franchised restaurants under McDonald’s.
Other quotes pointed the finger squarely at management:
Never in my long McDonald’s life have I seen just about every aspect of this corporate circus so mismanaged. All of the poor results fall on the store manager to deal with.
The relationship between the Owner/Operators and the Corporation continues to deteriorate. Too many of the Owner/Operators on our leadership teams will not stand up to the Corporation. The model that Ray Kroc and Fred Turner designed is no longer even a shadow of our current situation.
Many piled on the recent move to institute all-day breakfast. While McDonald’s U.S. President Mike Andres touted its success, franchisees lamented at the disorganized roll-out and additional work in the kitchen. Said one:
I am not sure what All Day Breakfast will do. We just rolled out. It adds complexity in the kitchen. It’s a problem at lunch with cabinet space and for most restaurants cooking to order is the best solution and asking the customer to wait.
Another franchisee saw through the offering and criticized it as window dressing:
It is another gimmick from the corporate ‘geniuses’ (using the word very lightly) in Oak Brook. If we would have simplified our already oversaturated menu beforehand, I might be more likely to try it.
Investors were even called out for getting too interested in the short-term launches from McDonald’s (it pays to remember that the alignment of shareholder and franchisee interests isn’t always 100%):
While there’s supposed to be a turnaround plan, it’s just a bunch of ideas to get Wall Street excited – but every idea that comes out of the home office comes down to just one thing: discounting/cheap food.
Wall Street fails to understand the corporate culture that allows a bureaucracy to be at least twice the size that it needs to be. The competency level of the regions has fallen to depths never known in the past.
In one of the more revealing statistics, franchisees were asked to quantify their business outlook for the next six months on a scale of 1 to 5, with 1 signifying “poor” and 5 as “excellent”. The average response received was 1.96. The mean score that highlighted the relationship between franchisees and McDonald’s was even lower: 1.48.
When reached for comment by Fortune, the company’s director of global media relations, Becca Hary, said:
We’re hearing from customers and the overwhelming majority of our 3,100 franchisees that All Day Breakfast is a hit! In fact, since the launch, McDonald’s has reached its highest brand score in two years according to YouGov BrandIndex.
Update: The company also provided a comment from franchisee LeAnn Richards in Arizona: “The franchisee community is as surprised by that survey as I was because we’re seeing such excitement and success in the restaurants.”
