McDonald’s Reopening Plans Face Reluctance From Some Franchisees

McDonald’s Corp. is planning for fully reopened dining rooms in the U.S. this summer, though it’s running into opposition from some franchisees who say they don’t have enough staff or interested diners to make it worthwhile.

The company said that while it isn’t setting a hard deadline for franchises, it’s aiming for a rolling re-opening between now and the end of August, as Covid-19 rates and local regulations allow. Franchisees own about 95% of McDonald’s roughly 13,600 U.S. locations, and the company said it plans to be flexible and work with individual owners on alternate plans when necessary. Only about 15% of customer dining areas were open as of last month, McDonald’s said.

Some franchisees say they want to reopen, especially after spending so much on recent renovations. Others are reluctant to bring back in-store dining. That’s because their restaurants are doing well already from drive-thrus, takeout and delivery, which can be operated with fewer staff. Restaurants across the U.S. have had a hard time finding workers, with McDonald’s recently announcing a wage hike at its company locations to entice employees.

Many diners aren’t demanding seating areas, either, with one-third of Americans still “definitely” avoiding eating out as of late April, according to industry researcher Datassential.

The world’s biggest restaurant company is often a bellwether for the fast-food industry, so its decision to bring back indoor dining could spark a ripple effect in the U.S. McDonald’s shares are up about 8% this year, fueled by the strength of its drive-thru business and the launch of its new chicken sandwich.

While franchisees say there’s mounting pressure from corporate to reopen as the CDC relaxes guidelines an elected group of franchise leaders has said it will support store owners who aren’t ready to reopen their dining rooms. Self-serve drink machines are one thorny issue for franchisees reluctant to re-open seating areas.

This week, McDonald’s moved to loosen some of its other restrictions, including letting vaccinated customers discard their face masks. In an internal memo, the company said that workers and managers will remain masked, but won’t have to use gloves anymore, “based on the low risk of transmission via surface contact.” Restaurants will also keep protective barriers, adhere to social distancing guidelines and continue to carry out wellness checks, among other measures.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.