McDonald’s tells franchisee to pay employees less

by confuzzled dude Wed Aug 13, 2014 11:26 am

The fast-food industry has become the face of the minimum wage battle. At McDonald’s, that struggle has become even complicated. Franchisees, too, often feel that following all the company’s rules and paying all its fees leaves little leftover for them, let alone their employees.

“Three years ago, what started us working on [California bill] SB 610 was McDonald’s would not renew our franchise inside the Serramonte mall. And we went to our attorney, and he said we have no rights. So we started this bill. I got called into McDonald’s and told I can’t give away corporate secrets. And I said, ‘What can I talk about?’ and I got dead silence. And in our most recent Assembly hearing, I spoke about what I had been told by a McDonald’s representative, which is that ‘You guys can make more money if you pay your employees less.’

[If McDonald's workers unionized], I think the biggest negative effect would be that corporations, the big guys, couldn’t suck as much money off the top. I have mixed emotions on unions, and I told SEIU this. Sometimes I think the union benefits are a little over the top. But by the same token, in this stagnant economy that we’ve got, the little people are getting screwed. So I’m sure you know of the lawsuits for wage theft from the employees against McDonald’s operators in California. Wage theft is wrong, and it comes a point at which people do need to protect themselves and their interests. If they’re working, they deserve to be paid.”

http://www.washingtonpost.com/news/storyline/wp/2014/08/04/first-person-kathryn-slater-carter-the-franchise-owner-taking-on-mcdonalds/

by Marathadi-Saamiyaar Wed Aug 13, 2014 12:00 pm

But, they get free Big Mac and Shakes.. Razz

by Kris Wed Aug 13, 2014 3:21 pm

confuzzled dude wrote:The fast-food industry has become the face of the minimum wage battle. At McDonald’s, that struggle has become even complicated. Franchisees, too, often feel that following all the company’s rules and paying all its fees leaves little leftover for them, let alone their employees.

“Three years ago, what started us working on [California bill] SB 610 was McDonald’s would not renew our franchise inside the Serramonte mall. And we went to our attorney, and he said we have no rights. So we started this bill. I got called into McDonald’s and told I can’t give away corporate secrets. And I said, ‘What can I talk about?’ and I got dead silence. And in our most recent Assembly hearing, I spoke about what I had been told by a McDonald’s representative, which is that ‘You guys can make more money if you pay your employees less.’

[If McDonald's workers unionized], I think the biggest negative effect would be that corporations, the big guys, couldn’t suck as much money off the top. I have mixed emotions on unions, and I told SEIU this. Sometimes I think the union benefits are a little over the top. But by the same token, in this stagnant economy that we’ve got, the little people are getting screwed. So I’m sure you know of the lawsuits for wage theft from the employees against McDonald’s operators in California. Wage theft is wrong, and it comes a point at which people do need to protect themselves and their interests. If they’re working, they deserve to be paid.”

http://www.washingtonpost.com/news/storyline/wp/2014/08/04/first-person-kathryn-slater-carter-the-franchise-owner-taking-on-mcdonalds/

>>>I read the article and it seems there are a couple of issues here. One is that the franchisor is passing the buck when it comes to their systems not working. If there are enough franchisees who see this as a legal problem, they have the option to sue the franchisor. The other problem seems to be that the business model is not viable given the squeeze due to low revenues and high costs. If that is the case, the franchisees can opt out altogether. The franchisor was being factual with the statement about lower wages. If that doesn't work in certain local markets, they won't get employees. It is a supply and demand thing and the franchisor will end up being the loser if they lose franchisee interest in key markets. At its core, if the author is stating facts, this is a legal problem and an economic model problem. I didn't get the part about 'wage theft', unless McD was withholding a part of employees' paychecks illegally.

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McDonald’s tells franchisee to pay employees less

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