The changes in McDonald’s franchise agreements

The community of McDonald’s franchisees is not happy with the changes made by the company’s CEO and US President.

It is because the new terms will include the evaluation of potential new operators equally. So, the current franchisees’ spouses and kids would not be getting preferential treatment.

New terms will also be on separating the evaluation of whether owners can run additional restaurants from the process with which it renews leases, given in 20-year terms.

These new terms will be valid starting beginning of 2023An independent franchisee advocacy group for McDonald’s owners polled its membership regarding changes made to franchisee lease agreements.

There is an assumption among the franchisee community that these changes are being made to get new owners with higher lease rates. Also, they believed that the CEO is lack of confidence.

Will these changes cause franchisees to withdraw their leases and will this affect the share price of McDonalds as well?

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