Recognizing that initial costs represent a socioeconomic barrier to entry for some McDonald’s franchisees, the fast-service chain announced plans on Wednesday to invest $250 million over five years to provide financing alternatives designed to build up a more diverse operator base. to build.
The move is part of an ongoing journey for McDonald’s, which is under increasing pressure to address social and economic inequalities within its global system of nearly 40,000 restaurants, which are 93% franchised.
Earlier this year, McDonald’s made commitments to bring more underrepresented groups into corporate leadership and set goals to build diversity in its supply chain. The company also reported progress in achieving equal pay for women and other underrepresented groups in its own restaurants and corporate offices.
The focus on franchisees aims to build an operator base that is more reflective of the communities the restaurant chain serves.
To do that — and to attract more qualified franchisees in general — the company said it will work to make McDonald’s ownership more financially accessible to underrepresented groups, according to a post from Chris Kempczinski, McDonald’s president and CEO. , viewed by Nation’s Restaurant News.
“During a period of record performance, we need to challenge ourselves – even more – to invest in the future,” Kempczinski said in a statement. “Today’s announcement to attract franchisees who represent the diverse communities we serve is fundamental to that goal and builds on McDonald’s rich history and pride in reflecting those we serve. With this action, we are taking another step forward in fostering an environment where equal opportunity is part of the lived experience for all our communities.”
The program, which will be tailored to specific markets, will seek to reduce initial equity requirements for eligible franchise candidates, the company said. McDonald’s will also leverage its network of banking partners to increase access to financing solutions.
“Access to capital remains a challenge in closing the wealth gap in the US, especially for minority entrepreneurs,” Nicole Elam, president and CEO of the National Bankers Association, said in a statement. “Efforts to remove barriers to entry for aspiring entrepreneurs are critical to bridging that gap — providing a foundation for a life of opportunity and the creation of generations of wealth.”
In addition, McDonald’s said it will expand its franchise recruiting and training efforts across all backgrounds, including historically underrepresented groups. For example, new franchisees will be supported and mentored by more experienced operators, and the chain will learn lessons from international franchise development programs, which have built relationships with local business schools to create a curriculum for new franchisees.
In 2020, McDonald’s operators from underrepresented groups (those who identify as black, Asian, or Hispanic) accounted for 29.6% of all U.S. franchisees, and 28.9% of domestic operators are women, which, according to McDonald’s, is “more than above” the national averages.
According to data from the US Census Bureau, covering 2019, about 18.7% of employer companies were minority-owned and 20.9% were women-owned.
In recent years, McDonald’s has reported discrimination by some black operators who accused the chain of purposely placing them in underperforming restaurants.
Kempczinski also backtracked earlier this year on some comments deemed racist and insensitive following the deaths of two children in Chicago.
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