Restaurant Dive’s Post

McDonald's Corp (NYSE:MCD) said it is raising its royalty fees for new franchised #restaurants in the United States, marking the first increase in its franchise royalty rates in almost 30 years. According to media reports citing an internal letter, the #fastfood company is increasing its franchise royalty fees from 4% to 5% for operators of new restaurants in the U.S. starting January 1. #McDonald’s said the change "will help us maintain our competitive edge – so we can continue offering opportunity to independent small business owners and their families for generations to come," according to the letter, as reported by Reuters. The increased price does not affect franchises that do not change their footprint, buy a restaurant from another operator, rebuild their restaurant on the same site, or transfer the restaurant to a family member. More at #Proactive #ProactiveInvestors http://ow.ly/UOUW104Vbbi

This webinar is a must for all restaurant operators aspiring to thrive in multi-unit franchising! #franchisinginnovation #restaurants #innovation

"In a lawsuit filed in Quebec Superior Court on Thursday, 16 companies with Tim Hortons franchise licences allege the TDL Group Corp.'s contracts "place it in a position of absolute dominance" over their combined 44 restaurants. "Through these Tim Hortons licence agreements ... TDL controls every essential lever involved in the running of a restaurant," from deals with suppliers to equipment, the plaintiffs allege in their application. TDL also sets prices for both menu items and the ingredients restaurants need to make them, the lawsuit contends. Yet TDL's policy of fixing prices didn't adapt to the market, the franchisees assert. They argue the franchisor's rules leave them "no room for manoeuvre" and impose costs they are unable to match in sales. A resulting blow to their profits has reduced the value of their restaurants and made it difficult for them to bear the cost of renovations and other investments that TDL expects, they say. Before 2019, the franchisees' profitability mostly aligned with the forecast TDL provided them, the lawsuit states. But profits began to fall after that. And between 2021 and 2023, the 16 franchisee companies say they lost out on a combined $18.9 million."

Federal Trade Commission cracks down on ‘deceptive and unfair’ franchising practices "The Federal Trade Commission has responded to an uptick in complaints from business franchisees over “unfair and deceptive practices by franchisors,” including hidden franchise fees and contract provisions, by cracking down on these illegal practices. Food and beverage franchisees comprise more than a third of all franchisees nationally across all industries, making it the country’s largest segment, according to a 2022 FRANData report by the market research firm." Read more: https://ow.ly/ZSQV50SEzfA via Nation's Restaurant News #Hospitality #HospitalityIndustry #HospitalityLaw #RestaurantOperations #Franchise #Franchising #FoodansBeverage #FTC

THE COST OF BUYING A FAST FOOD FRANCHISE IN SA🇿🇦 SA fast food market is expected to grow by 7.9% annually and reach a valuation of (R85 billion) $4.9 billion by 2026. So I’m looking at franchises to see how much it would cost to own one of these top fast food outlets. Lets start with KFC they have 960 shops in SA,& they expect new owners to pay close to R6 million. McDonalds has 300 outlets & the average investment required – is between R4m and R6m. & they need a 35% unencumbered cash contribution – between R1.4m and R2.1m Also just note that total investment for these outlets depends on location, size, styling, and varying pre-operation expenses. Would you consider buying into a #franchise and which one would it be ?

McDonald's Stores Close in Sri Lanka After Deal With Partner Ends McDonald's has ended an agreement with its local partner in Sri Lanka and all 12 outlets in the country have been closed, an attorney for the U.S. company said on Sunday. ~ COLOMBO, March 24 (Reuters) "The parent company decided to terminate the agreement with the franchisee due to standard issues," said Sanath Wijewardane, an attorney for McDonald's. "They are not in business in the country. They may decide to return with a new franchisee." Reason for Closure ? The closure stems from a disagreement between McDonald's and its Sri Lankan franchise holder over adherence to McDonald's standards, specifically hygiene standards according to some news sources. Temporary Closure ?   There's a possibility of McDonald's returning to Sri Lanka with a new franchise partner. Current Status ? As of today, March 25th, 2024, all 12 McDonald's outlets in Sri Lanka remain closed due to a court order Daily Mirror #MC #MNC #Franchise