Why German Franchisees Aren’t Lovin’ It at McDonald’s

By Stephen Fuchs on Email @StephenWFuchs

McDonald’s is everywhere, with almost 37,000 locations in 120 countries, the fast food chain serves roughly 68 million customers a day. It may sound like a money pot for those franchise owners who amount to 80% of the restaurants, but for those investors in Germany, getting a piece of that apple pie is becoming harder as corporate competition is running them into bankruptcy.

Franchise owners in Germany are now going up against McDonald’s with a formal complaint to Germany’s Federal Cartel Office, calling the company out for exploiting its corporate power so that the franchised store cannot compete with those run by McDonald’s itself.

When McDonald’s decides to run a promotion, it makes it a better deal for the company versus those running a franchised locations that must pay more for the food items. This leads to many of these restaurants having no choice but to increase the cost of their menus. Customers at franchise locations in Germany pay an average of 19 t0 52 cents more on every item. Most customers likely don’t notice the difference, but franchisee’s feel the heat as they must compete against their own owners.

Germany’s legal filing wasn’t the only one on Tuesday. Similar complaints were filed in other European countries, including France and Italy. McDonald’s is also facing heat from the European Commission, which is looking into whether the company has been funneling money into other countries to avoid paying taxes on revenue.

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Sources: Handelsblatt

Photo: Mike Mozart [Flickr]

Stephen Fuchs
Stephen founded German Pulse and LGBT Germany out of a passion to introduce Americans to a Germany that goes beyond beer and polka (although with enough beer he has been known to polka it up a bit). He's a coffee addict, lover of wine and good times, a hit in the kitchen and editor of TV commercials. You can follow him on Twitter (@StephenWFuchs) to find out a lot more.
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