Franchising Ethics: Why a McDonald’s Franchisee Called It Quits

business_ethics_highlights_2Franchising arrangements are interesting both as a form of entrepreneurship and as a source of topics in business ethics. The franchisee acts in the franchisor’s name, but the franchisee is an independent entrepreneur whose ability to adapt to market conditions is limited by the franchising agreement. Franchisors’ and franchisees’ overall fates are connected, but that doesn’t keep their interests from diverging as circumstances change, creating incentives for opportunistic behavior. It is precisely because their interests can diverge that successful franchising arrangements are built on a high degree of trust between franchisor and franchisee. This piece, which links to a longer Bloomberg Business article, features a longstanding McDonalds franchisee who believes that McDonalds has opportunistically shifted more of the burdens of running a successful franchising business model onto franchisees while capturing more of the benefits for itself. Things got so bad, from his perspective, that he ended a six-decade career connected to McDonald’s—first as a franchise employee and later as a franchise owner. >>>

LINK: After 50 Years With McDonald’s, Franchisee Declares “I Wanted To Get The Hell Out” (by Chris Morran for Consumerist)

A Michigan man who spent his entire adult life working for McDonald’s — and who, until recently, had been a McD’s franchisee since 1980 — says the company he’d grown up with had lost sight of its core business.

“The people were different, the company was different,” he says. “It became very frustrating.”

He tells Bloomberg that, rather than focusing on making good food quickly, McDonald’s has made a habit of introducing new menu items that cost franchisees money and take more time to prepare.

What do you think?


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