There have been protests at the McDonald’s Corporate Headquarters recently. The protestors are demanding a higher minimum wage.
The problem is that most McDonald’s are owned by independent owner operators and not by the corporate offices. I found an old statistic that has a total of 14,157 McDonald’s in the US and only 1,550 of them were corporate owned.
So the protestors are in the wrong place. As employees of those franchises, one would think that they would know who owns the franchise. They probably sign their paychecks.
McDonald’s charges each franchise a 4% service fee for every dollar of gross sales. Then there is the not less than 4% of gross sales fee for required advertising and promotion. So the owner of the franchise is already down to $.92 of each dollar in sales. If a credit card was used, there is a cost of around 1.5 to 3%; so they may be down to $.90 per dollar.
They also has to buy all products and supplies from McDonald’s at McDonald set prices. I won’t even go into the other costs: i.e. rent, insurance, supplies, repairs and maintenance, uniforms, etc.
McDonald’s has made its name with low cost foodstuffs. When you only buy off the $1.00 menu, there is not a lot of room for large salaries, especially if you want a return on your investment.
They should be encouraging McDonald’s to give credit to franchises who do offer better hourly pay and benefits. This would be a win, win for the employee and franchise. Not so much for the McDonald shareholders.
I know there are huge profits in some McDonald’s, but I really don’t think that all of them make millions of dollars in profit a year. I have all been in restaurants and wondered how they are still in business. I count the employees and calculate an approximation of what it costs to be open and the amount of sales needed to cover the base expenses. (there was a spice store in Oak Park that completely baffled me until it closed).
I tell people if you are not happy with where you are and what you are paid, start a business. If nothing else you can see what is involved in keeping the business going. It will either spur you to get bigger faster or make you appreciate the job you had or are going to have.