F.T.C. Public Comment 61

WE WERE TOLD BY THE REGIONAL MANAGER, NO WAY, WOULD MCDONALDS CORPORATION ALLOW A FRANCHISEE TO OWN THE REAL ESTATE. ON STORE #2170, THROUGH MONTHLY RENTAL PAYMENTS PAID BACK MCDONALD'S REAL ESTATE PURCHASE IN 3 ½ YEARS. ON STORE #2892, THROUGH MONTHLY RENTAL PAYMENTS PAID BACK MCDONALD'S REAL ESTATE EXPENSES IN 2 ½ YEARS.

FTC.jpg

U.S. Federal Trade Commission
April 30, 1997

Public Comment
Frederick Fiore, Joan Fiore, franchisees

Request for public comment on possible revisions to The Franchise Rule.

Comment #61

MCDONALD'S MCVICTIMS RIGHTS

JOAN FIORE
161-04 95TH STREET
HOWARD BEACH, NEW YORK 11414
718-835-5613 FAX 718-323-5018

HOW CAN MCDONALD'S BE ALLOWED TO EARN A PROFIT

FROM THEIR MISDEEDS AND AT THE SAME TIME DEVASTATE THE LIVES OF THE FRANCHISEES AND FRANCHISEE FAMILIES WHO HELPED THEM BECOME THE MCDONALD'S DYNASTY?

TO: SECRETARY

FEDERAL TRADE COMMISSION
ROOM 159
SIXTH STREET & PENNSYLVANIA AVE., N.W.
WASHINGTON, D.C. 20580

RE: 16 CFR PART 4365

FROM: MCDONALD'S MCVICTEM RIGHTS ADVOCATE

UNJUSTLY TERMINATED MCDONALD'S
FRANCHISEE-
FREDERICK & JOAN FIORE
161-04 95TH STREET
HOWARD BEACH, NEW YORK 11414
718-835-5613
718-297-9595
FAX 718-323-5018

MCDONALD'S MCVICTEMS RIGHTS ADVOCATE

MY HUSBAND FRED WAS A MCDONALD'S FRANCHISEE IN THE NEW YORK REGION FOR ALMOST 20 YEARS. OUR FAMILY HAD BUILT THE MCDONALD'S NAME AND IMAGE IN OUR BUSINES COMMUNITY THROUGH SACRIFICE AND DEDICATION.

WE OPENED OUR FIRST MCDONALD'S RESTAURANT ON OCTOBER 17, 1972 IN LONG ISLAND CITY, NEW YORK AND EVENTUALLY OWNED A TOTAL OF FIVE STORES.

OUR FAMILY WORKED HARD IN OUR MCDONALD'S VENTURE, HOPING TO ADHIEVE THE GREAT AMERICAN DREAM OF ENTREPRENEURIAL FINANCIAL INDEPENDENCE IN OUR RETIREMENT YEARS.

BEFORE BECOMING A MCDONALD'S FRANCHISEE, WE OWNED OUR OWN HOME, A BUSINESS, AUTOMOBILES, HAD SAVINGS ACCOUNTS, MEDICAL INSURANCE, LIFE INSURANCE POLICIES AND RAISED SIX CHILDREN ALL OF WHOM WENT TO PRIVATE SCHOOLS.

MCDONALD'S CORPORATION IS IN THE REAL ESTATE BUSINESS. THEY OWN THE REAL ESTATE IN OVER 70% OF THEIR SITES. THE OTHER 30% IS LEASED AND THEN SUB-LEASED TO THE FRANCHISEE. MCDONALD'S CORPORATION BEGINS A DE-FRANCHISE PROCESS ONCE FRANCHISEES APPROACH THE END OF THE 20 YEAR LEASE. THEIR OBJECTIVE IS TO OBTAIN THE LOCATIONS FAT BARGAIN PRICES. MCDONALDS' CORPORATION THEN
BEGINS A PARTNERSHIP ARRANGEMENT WITH A NEW, YOUNGER, FRANCHISEE INCREASING THEIR RAVENOUS APPETITE FOR CORPORATE PROFITS THROUGH HIGHER RENT, SERVICE, LEASEHOLD AND CAPITAL IMPROVEMENTS.

MCDONALD'S CORPORATION BEGAN A DE-FRANCHISE PROCESS AS WE WERE APPROACHING THE END OF OUR TWENTY YEAR LEASE.

AFTER WORKING FOR OURSELVES FOR THE BETTER PART OF OUR LIVES, AT THE AGES OF 52 AND 53, WE WERE SUDDENLY LOOKING FOR EMPLOYMENT. WE SACRIFICED A BIG PORTION OF OUR LIVES, SO WE COULD HAVE SOMETHING WHEN WE RETIRED. OUR CURRENT FINANCIAL CONDITION IS THAT WE WILL HAVE TO CONTINUE WORKING IN ORDER TO EXIST. IT IS VERY DEPRESSING TO LEARN THAT WHAT ONE HAS WORKED FOR IS GONE.

THE FACTS ARE THAT MCDONALD'S CORPORATION ROBBED US OF OUR SAVINGS. THEIR GREED DEPRIVED US OF A DREAM WE HAD FOR OUR FUTURE TOGETHER.

MCDONALD'S CORPORATION HAS ACCOMPLISHED A THOUSAND TIMES OVER IN COLD CALUCLATION WITH THE SWISH OF THEIR PEN AND DESTROYED FRANCHISEE FAMILIES, FROM EVERY STATE AS WELL AS INTERNATIONALLY.

MCDOARLD'S HAS SINGLE HANDEDLY DESTROYED FRANCHISEE'S LIFESTYLES., SAVINGS, PENSIONS, RETIREMENT PLANS, HOMES, CAUSED FINANCIAL RUIN, BROKEN MARRIAGES, UPROOTED FAMILIES, BACKRUPTCY AND SUICIDES. MCDONALD'S CORPORATION HEINOUSE CRIME OF OUT-RIGHT THIEVERY HAS WIPED OUT HUNDREDS IF NOT THOUSANDS OF FRANCHISEE FAMILIES.

OUR FAMILIY IS A TYPICAL EXAMPLE OF THE FATE THAT FACES MANY OF MCDONALD'S FRANCHISEES.

HAD WE SPENT 20 YEARS AS A JANITOR WITH A PENSION, WE SHOULD HAVE FOUND OURSELVES IN A FAR BETTER FINANCIAL POSITION.

MCDONALD'S CORPORATION SPENDS TWO BILLION DOLLARS A YEAR ADVERTISING A SQUEAKY CLEAN IMAGE AND A FAMILY IMAGE. BUT THIS COULDN'T BE FARTHER THAN THE TRUTH. CAN THERE BE ANY OTHER COMPANY WHERE THERE IS SUCH A IMMENSE DISPARITY BETWEEN IMAGE AND REALITY?

THERE IS A OVERWHELMING AMOUNT OF MCDONALD'S FRANCHISEES IN THE AGE BRACKET OF 40 TO 55 YEARS OF AGE FROM THE STATES OFF NEW JERSEY, TEXAS, NEW HAMPSHIRE, WASHINGTON D.C., NEW YORK, FLORIDA, WHO ONCE THE DE-FRANCHISE PROCESS BEGAN DECIDED TO BLOW THEIR BRAINS OUT.

MCDONALD'S MCVICTEMS RIGHTS ADVOCATE

WHY MUST MCDONALD'S FRANCHISEES SELL COCA-COLA EXCLUSIVELY….DOES COCA-COLA OWN ANY OF THE FOUNTAIN EQUIPMENT?

SECTION 1 OF THE SHERMAN ANTITRUST ACT AND SECTION FIVE OF THE FEDERAL TRADE COMMISSION ACT PROHIBIT "CONTRACTS." COMBINATIONS OR CONSPIRACIES IN RESTRAINT OF TRADE AND UNFAIR METHODS OF COMPETITION IN COMMERCE."

AN ORGANIZATION SHALL NOT DIRECTLY OR INDIRECTLY RESTRICT FREE AND LAWFUL COMPETITION. STRICT COMPLIANCE WITH THE ANTITRUST LAWS MUST ALWAYS BE KEPT IN MIND. AND ALL MEETINGS AND OTHER ACTIVITIES MUST BE CONDUCTED IN ACCORDANCE WITH THIS POLICY.

ONE OF THE ANTITRUST VIOLATIONS A GROUP OF COMPETITORS CAN COMMIT IS AN AGREEMENT TO SET PRICES AT A FIXED LEVEL. SUCH AN AGREEMENT IS A PER SE VIOLATION OF THE ANTITRUST LAWS. EVEN IF THE PRICES SET ARE REASONABLE OR THE ENDS SEEMS MERITORIOUS. SIMILARLY, TERMSN AND CONDITIONS OF PRODUCT SALES WHICH AFFECT ANY PURCHASER SHOULD NOT BE DISCUSSED. INFORMAL
UNDERSTANDINGS AND PLANNED COURSES OF ACTIONS ON THESE SUBJECTS ARE ALSO CLEARLY FORBIDDEN.

ADMINISTRATIVE OR DISCIPLINARY ACTION AGAINST OWNERS OR THE EXPULSION OF ANY OWNER FROM A ORGANIZATION WHICH MAY RESULT IN ECONOMIC INJURY TO THE AFFECTED MEMBER. MAY CONSTITUTE AN ILLEGAL BOYOCOTT OR RESTRAINT OF TRADE.

STATISTICAL REPORTING IS ANOTHER COMMON ORGANIZATION-SPONSORED ACTIVITY WHICH ORGANIZATIONS HAVE USED TO FURTHER PRICE-FIXING AND PROMOTE THEOR MONOPOLISTIC SCHEMES.

ANTITRUST PROBLEMS ALSO ARISE WHEN ORGANIZATIONS BECOME INVOLVVED IN INDUSTRY-WIDE RESEARCH AND DEVELOPMENT PROGRAMS. WHEN POOLING OF RESULTS EXISTS. ORGNIZATION SPONSORED JOINT RESEARCH AND DEVELOPMENT ACTIVITIES MAY INJURE COMPETITION BY DILUTING THE COMPETITIVE PRESSURE TO INNOVATE.

REINVESTMENT

MCDONALD'S CORPORATION HAS AN ON-GOING POLICY FOR A FRANCHISEE TO RE-INVEST THE REAL ESTATE AND BUILDING.

THIS IS A MCDONALD'S VIOLATION OF A FTC RULE IN THE DELIBERATE OMISSION OF A PROFIT & LOSS LINE ITEM CALLED "RE-INVESTMENT"

MY HUSBAND AND I WERE TOLD BY THE MCDONALD'S REGIONAL MANAGER THAT MCDONALD'S EXPECTED THE FRANCHISEE TO INVEST 10% OF THE ANNUAL SALES TOWARD INVESTMENT.

MCDONALD'S CORPORATION DECREASED THE SELLING PRICE OF OUR FIVE MCDONALD'S RESTAURANTS BECAUSE OF NEEDED "REINVESTMENT"

SOME OF THE RE-INVESTMENT LINE ITEMS WERE DOUBLE-DRIVE THROPUGH BOOTH, CLAM SHELLS, GRILLS, PARKING LOT REPAIRS, ETC. AS PER PARAGRAPHY 13(A) OF THE FORCED SALE CONTRACT DATED MARCH 14, 1991, $75,000 WAS DEDUCTED FROM THE SELLING PRICE BECAUSE WE DID NOT HAVE A DOUBLE DRIVE THRU.

MCDONALD'S CORPORATION ONGOING FAILURE TO PROMPTLY PAY THEIR FRANCHISE OBLIGATIONS IS A MATERIAL BREACH OF THE FRANCHISE OBLIGATIONS TO ITS FRANCHISEES.

AS OF THIS DATE, MCDONALD'S CORPORATION HAS NOT PAID ME THE $75,000 AMONG OTHER "RE-INVESTMENT" ITEMS DEDUCTED BY THEM UPON THE FORCED SALES OF OUR FIVE MCDONALD'S STORES.

REMOVE THE BARRIERS THAT PREVENT MCDONALD'S FRANCHISEES FROM EXERCISING THEIR BASIS LEGAL AND CONSTITUTIONAL RIGHTS

MCDONALD'S CORPORATION FORCED MY HUSBAND TO SELL HIS FIVE MCDONALD'S STORES.

IN THE CONTRACT, THERE IS A CLAUSE CONTAINING A GENERAL RELEASE AND WAIVER.

THIS RELEASE CLAUSE FORBIDS ANY RECOURSE FROM THE BEGINNING OF TIME UNTIL ETERNITY.

FRANCHISEES ADVERTISING FUNDS

A RECENT ARTICLE FROM THE OCTOBER 9, 1996 CHICAGO TIMES AND THE NEW YORK TIMES, CLAIM THE " MCDONALD'S MISSTEPS", SENIOR VP PAUL SCHARGE, DESCRIBING THE $20,000,000 ERROR IN OPNAD BUDGETING AS "THIS IS A BUREAUCRATIC SCREW-UP"

THE NEW YORK 1996 SUPER-SIZE-IT ADVERTISING AWARD GOES TO LEO BURNETT, THE AD AGENCY THAT HANDLES THE MCDONALD'S CORPORATION ADVERTISING ACCOUNT.

RESTRAINING TRADE

MCDONALDS'S ONLY PERMIT A LICENSE TO SELL TO A QUALIFIED APPLICANT AND THEIR QUALIFIED APPLICATION LIST

MCDONALD'S CORPORATION WANTS NO COMPETITIVE BIDDING ON ANY LICENSE SALES UNLESS MCDONALD'S IS THE SELLER

MCDONDALD'S WILL NOT PERMIT INDIVIDUAL LICENSEE SELLERS TO OFFER BUYER FINANCED LEASE (BFL) PROGRAMS WHICH THE MCDONALD'S CORPORATION OFFER TO THEIR BUYERS.

MCDONALD'S WILL NOT PERMIT INDIVIDUAL LICENSE SELLERS TO OFFER BUYERS SUCH BUSINESS TERMS (RIGHT TO RE-ENTRY, ETC.) AS ARE USED IN OTHER 3RD PARTY LICENSE SALES.

MCDONALD'S HAS CHASED PROSPECTIVE PURCHASERS AWAY FROM OPERATORS AND SWITCHED THE PROSPECT TO PURCHASING UNITS FROM MCDONALD'S.

MCDONALD'S REGULARLY USES OF THE EXPANSION THREAT TO CONVEY MESSAGES TO PERSPECTIVVE BUYERS (OTHER THAN MCDONALD OPERATORS) WHETHER AN EXISTING OPERATOR SHOULD PURSUE A PURCHASE OR NOT OF ANOTHER OPERATOR.

MCDONALD'S CORPORATION ALSO USES THEIR OPERATIONAL CONSULTANT FOR ON-GOING QUALITY, SERVICE AND CLEANLINESS (QSC) INSPECTIONS (AS INTIMIDATION) PLUS MCDONALD'S WILL HAVE THEIR TOP MANAGEMENT TELL A LICENSEE HE SHOULD SELL AND AT WHAT PRICE.

RESTRAINING TRADE

MCDONALD'S CORPORATION REQUIRES THAT THE FRANCHISEE DEAL ONLY WITH SUPPLIERS THAT HAVE BEEN "APPROVED BY MCDONALD'S CORPORATION"

MCDONDALD'S CORPORATION HAD A SPECIAL ARRANGEMENT WITH COCA-COLA AND RECEIVVED A .25 CENT PER GALLON REBATE.

HAS THIS INCOME BEEN DISCLOSED ON THEIR FINANCIAL STATEMENTS? THE FTC, SECTION 436 l (a) (11) RULE REQUIRES A DESCRIPTION OF THE BASIS FOR CALCULATING AND THE ACTUAL AMOUNT OF ANY REVENUE OR OTHER CONSIDERATION TO BE RECEIVED BY THE FRANCHISOR FROM SUPPLIERS WHICH MCDONALD'S CORPORATION, AS FRANCHISOR REQUIRES.

MCDONALD'S CORPORATION RECENTY ENTERED INTO A RELATIONSHIP WITH DISNEY. HAS MCDONALD'S ACCURATELY DISCLOSED ON ITS FINANCIAL STATEMENTS THE MONEYS DUE AND/OR RECEIVVED IN ROYALTY AND PERKS?

AN INVESTIGATION SHOULD BE REQUIRED TO DETERMINE IF ANY OF THE MCDONALD'S BOARD OF DIRECTORS HAVE ANY PERSONAL FINANCIAL INTEREST (PERKS) OR RECEIVVE ANY NON-MONETARY CONSIDERATION FROM ANY "APPROVED SUPPLIER"

MC-ANTITRUST

1. MCDONALD'S RESTRAINTS ON THE RENEWAL, TRANSFER AND ALIENATION OF THE FRANCHISEE'S FRANCHISES CONSTITUTE UNREASONABLE RESTRAINTS ON TRADE AND/OR MONOPOLIZATION.

2. THE CONTRACTUAL PROVISIONS IMPOSED ON FRANCHISEES TO PURCHASE FOODS ONLY FROM SUPPLIERS APPROVED BY MCDONALD'S CONSTITUTED CONTRACTS, COMBINATIONS AND/OR CONSPIRACIES IN RESTRAINT OF TRADE.

3. MCDONALD'S CONDUCT IN REFUSING TO APPROVE THE SALE OFF A FRANCHISEE TO THE BUYER OF THEIR CHOICE CONSTITUTES AN UNREASONABLE RESTRAINT OF TRADE AND/OR MONOPOLIZATION OR ATTEMPTED MONOPOLIZATION.

4. MCDONALD'S MONOPOLIZED OR ATTEMPTED TO MONOPOLIZE THE RESALE MAKRET FOR MCDONALD'S FRANCHISES.

ENCROACHMENT

OUR FIRST MCDONALD'S OPENED ON OCTOBER 17, 1972 IN LONG ISLAND CITY, QUEENS, WITHIN EIGHTEEN MONTHS, THERE WERE TWO ADDITIONAL MCDONALD'S SOTRES FOR A TOTAL OF THREE WITHIN A 3/4 MMILE DISTANCE.

EVERYTIME A NEW MCDONALD'S RESTAURANT OPENS, IT IMPACT OR ENCROACHES A EXISTING MCDONALD'S RESTAURANT. THE INITIAL FACT IS THAT THE FAST FOOD SEGMENT OF THE RESTAURANT INDUSTRY IN THE UNITED STATES IS SATURATED WITH MCDONALD'S.

IN VYLENE ENTERPRISES, INC. VS. MAUGLES, INC., THE NINTH CIRCUIT COURT OF APPEALS, THE HIGHEST APPELATE DECISION YET APPROVING THE CONCEPT OF HOW THE COVENANT OF GOOD FAITH AND FAIL DEALING MAY OPERATE IN THE FRANCHISER-FRANCHISEE RELATIONSHIP AND THAT THE FRANCHISOR COULD NOT ACT TO DESTROY THE RIGHT OF THE FRANCHISEE TO ENJOY THE FRUITS OF HIS CONTRACT IS A LANDMARK
CASE.

RESTRAINT OF TRADE

MCDONALD'S CORPORATION LIED IN DEFENDING THE PRINCIPLE CASE WHICH DEFENDED THE TYING ARRANGEMENT OF THEIR LEASE AND LICENSE IN PART ON THE BASIS OF THE FOLLOWING:

"BECAUSE MCDONALD'S PURPOSEFULLY LOCATED NEW STORES WHERE THEY WILL NOT UNDERCUT EXISTING FRANCHISEE'S BUSINESS, MCDONALD'S FRANCHISEES DO NOT HAVE TO COMPETE WITH EACH OTHER. A SUBSTANTIAL ADVANTAGE IN THE HIGHLY COMPETITIVE FAST FOOD INDUSTRY.

FEDERAL DISTRICT COURT OF APPEALS FOR THE FOURTH CIRCUIT 1980.

I HAVE BEEN DENIED BY PROPERTY RIGHTS, BY MCDONALD CORPORATION REFUSAL TO ALLOW ME TO CONSTRUCT A MCDONALD'S FRANCHISE ON FRANCHISEE'S PROPERTY.

RESTRAINING TRADE

MCDONALD'S CORPORATION ULTIMATELY FORCES MANY OF ITS OLDER FRANCHISEES OUT OF THE SYSTEM BY A NUMBER OF AVENUES

ONE OF WHICH IS TO PURCHASE THEIR FRANCHISEES STORES AT BARGAIN BASEMENT PRICES AND ULTIMATELY INFLATING THEIR EARNINGS AND DEVALUING THE FRANCHISEES ASSETS.

MY HUSBAND WAS FORCED TO SELL HIS MCDONALD'S RESTAURANT LOCATED IN BROOKLYN, NEW YORK FOR 20% OF ITS TRUE MARKET VALUE.

BANK OF BOSTON A" APPROVED" BANK HAD THE BUSINESS NOTE ON THE BROOKLYN STORE. ALTHOUGH OUR MONTHLY NOTE PAYMENTS WERE MADE ON TIME, THEY CALLED IN THEIR NOTE, THEREBY, PRESSURING MY HUSBAND TO SELL AT THE MCDONALD'S STIPULATED BARGAIN BASEMENT PRICE.

THE AMOUNT OWING BANK OF BOSTON WS MORE THAN THE MCDONALD'S CORPORATION OFFER, HOWEVER, THE BANK OF BOSTON, WITHOUT DOING ANY CASH FLOW ANALYSIS APPLIED THE DIFFERENCE TO THE LAST MCDONALD'S STORE THAT WE OWNED.

NOT ONLY DID WE HAVE MCDONALD'S CORPORATION'S THREAT OF DEFRANCHISING US, BUT TO ADD TO THE PRESSURE OF A RESTRAINED SALE. THE BANK OF BOSTON A "APPROVED" BANK CALLED IN THEIR NOTE.

RESTRAINT OF TRADE

THERE IS OVERWHELMINGLY DISPARITY IN BARGAINING POSITIONS BETWEEN A FRANCHISOR AND A FRANCHISEE BEFORE THE SALE AND AFTERWARDS.

A FRANCHISEE MAY HAVE ENOUGH MONEY TO INVEST IN INVEST IN A FRANCHISE AND TO RETAIN COUNSEL TO REVIEW THE FRANCHISE AGREEMENT BEFORE THE INVESTMENT IS MADE. THE QUESTION IS WHAT GOOD DOES THAT DO IF THE FRANCHISOR HAS A BUILDING ON ITS CORPORATE CAMPUS HOUSING HUNDREDS OF ATTORNEYS WHO HAVE
SPENT DECADES FINE-TUNING FRANCHISE DOCUMENTS TO THE PONT THAT THEY SHOULD BE USED AS EXAMPLES OF UNCONSCIONABLE CONTRACTS IN THE CONTRACTS CLASSES OF LAW SCHOOLS WORLDWIDE?

AS RELATES TO THE MCDONALD'S CORPORATION VERSUS THE POTENTIAL/PRESENT FRANCHISEE, THE UNBALANCE IN BARGAINING POSITION GIVES THE FRANCHISOR THE POWER TO PICK SITES AND BUILD BUILDINGS WITHOUT WARRANTY OR RECOURSE AGAINST THE FRANCHISOR. IT FORCES THE FRANCHISEE TO PAY FOR ALL MAINTENANCE
AND REPAIR COSTS ON THAT SITE AND IN ANY MCDONALD'S RESTAURANT REGARDLESS OF THE CAUSE OF THAT COST, INCLUDING FRANCHISOR FRAUD AND NEGLIGENCE, IT PERMITS THE FRANCHISOR TO DETERMINE WHO THE FRANCHISEE CAN BUY SUPPLIES FROM, IT PERMITS THE FRANCHISOR TO ESTABLISH THE PRICES THAT THE SUPPLIER CHARGES, INCLUDING A UNION TRANSPORTATION COST FOR DELIVERY, REGARDLESS
OF WHETHER YOUR RESTAURANT IS ONE MILE OR FIVE HUNDRED MILES FROM THE SUPPLIERS PLACE OF BUSINESS; IT PERMIS THE FRANCHISOR TO SUBJECTIVELY ASSESS WHETHER A FRANCHISEE IS COMPLYING WITH THE FRANCHISE STANDARDS; IT PERMIST HE FRANCHISOR TO REQUIRE MINIMUM GROSS MONTHLY SALES THAT THE UFOC AND THE FRANCHISEEE AGREEMENTS REQUIRE, IT PERMITS THE FRANCHISOR TO REQUIRE
PROMOTIONAL ITEMS AT BELOW COST PRICES; IT PERMIS THE FRANCHISOR TO ARBITRARILY DETERMINE IF A FRANCHISEE IS EXPANDABLE BASED UPON THE FRANCHISE AGREEMENTS. IT PERMITS THE FRANCHISOR TO TERMINATE FRANCHISES ON THE DEATH OF THE PRINCIPAL FRANCHISOR (ONCE THE FRANCHISES HAS BEEN DETERMINED TO BE UN-EXPANDABLE) TO THREATEN OR TO TERMINATE THE FRANCHISE IF THE FRANCHISEE
ENTERS INTO OTHER BUSINESS OPPORTUNITIES WITH HIS CAPITAL AND TIME; IT PERMITS THE FRANCHISOR TO SUBJECTIVELY DETERMINE IF A FRANCHISE IS GOING TO BE RENEWED; IF THE FRANCHISE IS NOT RENEWED, IT PERMITS THE FRANCHISOR TO PUNITIVELY REVIEW AND APPROVE POTENTIAL BUYERS AND THE PURCHASE PRICE OF THE FRANCHISE. MCDONALD'S CORPORATION, AS FRANCHISOR AND LANDLORD, IS THE
BEST EXAMPLE OF WHAT HAPPENS IN A BUSINESS SYSTEM THAT IS TOTALLY UNREGULATED AND WHERE FRANCHISEES HAVE ABSOLUTELY NO RIGHTS
OF RECOURSE.

DENIAL OF PROPERTY RIGHTS
MCDONALD'S CORPORTION IS IN THE REAL ESTATE BUSINESS.

THEY OWN THE REAL ESTATE IN OVER 70% OF THEIR SITES, THE OTHER 30% IS LEASED AND THEN SUB-LEASED TO THE FRANCHISEE.

MCDONALD'S BEGINS A DEFRANCHISE PROCES ONCE FRANCHISEES APPROACH THE END OF THE 20 YEAR LEASE. THEIR OBJECTIVE IS TO OBTAIN THE REAL ESTATE LOCATIONS AT BARGAIN PRICES.

MCDONALD'S CORPORATION THEN BEGINS A PARTNERSHIP ARRANGEMENT WITH A NEW, YOUNGER FRANCHISEE INCREASING THEIR RAVENOUS APPETITE FOR CORPORATE PROFITS THROUGH HIGHER RENT, SERVICE, LEASEHOLD AND CAPITAL IMPROVEMENTS.

MCDONALD'S CORPORATION BEGAN A DEFRANCHISE PROCESS AS WE WERE APPROACHING THE END OF OUR TWENTY YEAR LEASE.

MY HUSBAND AND I ON MANY OCCASIONS REQUESTED THAT WE BE ABLE TO PURCHASE OUR OWN REAL ESTATE AND BUILD A MCDONALD'S RESTAURANT.

WE WERE TOLD BY THE REGIONAL MANAGER, NO WAY, WOULD MCDONALDS CORPORATION ALLOW A FRANCHISEE TO OWN THE REAL ESTATE.

ON STORE #2170, THROUGH MONTHLY RENTAL PAYMENTS PAID BACK MCDONALD'S REAL ESTATE PURCHASE IN 3 ½ YEARS

ON STORE #2892, THROUGH MONTHLY RENTAL PAYMENTS PAID BACK MCDONALD'S REAL ESTATE EXPENSES IN 2 ½ YEARS.

MIGHT THIS BE CONSIDERED UNJUST ENRICHMENT?

For Review, see FTC “Table of Commenters”
http://www.ftc.gov/bcp/franchise/comments/tabcomm.htm


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