McDonald’s is tightening restaurant ownership rules as it seeks new franchisees

McDonald’s Corp. mcd,
is planning some of the biggest changes in decades to the franchise system that underpins its US operations in a bid to revitalize its base of restaurant owners.

According to an email to franchisees seen by The Wall Street Journal, executives this week told the burger chain’s franchisees they must undergo a stricter review every 20 years to keep their restaurants. McDonald’s will consider new factors such as B. Performance history when owners are asked to apply to keep their locations. The company will consider new factors, such as customer complaints, to determine which McDonald’s franchisees can add new locations.

In a shift that could affect some of the chain’s longest-serving restaurant operators, McDonald’s is also requiring some next-generation heirs to put up more money to continue operating their locations — and appoint a single family member as operator. Current McDonald’s franchisees may appoint multiple heirs as part of their agreement with the chain, e.g. B. a parent’s children to take over their McDonald’s restaurants.

“This change is consistent with the principle that the receipt of a new franchise term is earned, not given,” McDonald’s said in the announcement to franchisees regarding the changes.

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Brian Lowry

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