McDonald’s wrote an amazing letter that should really worry customers
Driven absurdly views the business world mostly with a skeptical eye and a firm wink.
We’re all in the same boat.
This is a popular mantra right now.
If your company is going to survive these hot times of the coronavirus, every hand on deck should be driving the ship forward.
Some business models can be more prone to friction during bad times.
McDonald’s has had tremendous success with its franchise model. However, as the company got bigger, it began to move more slowly. The change was icy. Which enables them to feel more up-to-date and innovative with so many sprightly competitors.
But when you have a franchise model, you really need the emotional and financial commitment of your franchisees.
McDonald’s didn’t quite succeed in this.
They really, really wanted something to compete with Chick-fil-APremium Chicken Sandwiches.
And they really, really didn’t want to pay too much for the modernization upgrades that McDonald’s badly wanted – and, frankly, needed.
With the arrival of the coronavirus, McDonald’s and its franchisees are struggling again. This time it looks really ugly.
Obviously, on-site accommodation and social distancing have impacted all fast food restaurants. But at least they have active transit and delivery options.
However, as sales have declined, franchisees turn to McDonald’s for help. Here is an example of a notice sent to McDonald’s by the National Owners Association – claiming to represent 1,300 franchise owners – seen from the Wall Street Journal:
Our members and most of the owners are increasingly losing confidence in the partnership and the management of the company.
So not just the 1,300, but “most of the owners”?
Unsurprisingly, the problem revolves around increased efforts to keep employees safe as the virus spreads across America. And who should pay for the increased measures?
McDonald’s seems to believe franchisees see it as an eternal piggy bank.
Which led to McDonald’s US boss Joe Erlinger writing back to the NOA:
If this is how the NOA tries to define its relationship with McDonald’s, then we really don’t have a relationship and I am very disappointed and discouraged about it.
Of course, in a franchise business there is often tension between the parent company and the franchisees.
And McDonald’s insists that its franchisee relationships are nothing unusual.
However, the tone of these communications suggests a really nasty split. If things get that bad, how can you work together effectively?
What could you say this means for customers?
If your business is marked by poor internal relationships, customers will likely feel it. Employees are more likely to do badly to the company because they have no emotional involvement in it. Managers are more likely to go through movement than hell or flood.
Worse still, if there are sales initiatives that are critical to the fast food business, franchisees and employees can run them half-heartedly if they don’t really like them.
I’m not suggesting that only happy companies make their customers happy.
However, if McDonald’s and its franchisees can’t agree on the basics of doing business – especially at a time like this – how can customers expect a brand experience that will encourage them to return again or more often?
And when they have a bad brand experience, they have plenty of choice. Often right next door.