1. This statement is supplementary to my two statements served in July 1993 and February 1994 and addresses new allegations made by the Defendants in their Re-Amended Defence served in April 1994.
2. On page 2 para 2 it is alleged that in or around 1991 I stated in an interview with the Evening Standard that "litter is certainly the biggest complaint" the company receives. It is correct that I made this statement but the Defendants have taken the statement out of context. As will be seen from the full article attached to this statement at Appendix 1, the observation I made was that in my opinion discarding litter is a social problem in this country and that people of all ages drop litter of all sorts, not just McDonald's packaging.
3. The company's policy on litter including provision of bins and the collection of litter is part of the company's policy worldwide and is engrained into the system. It is part of the company's philosophy of giving back to the community.
4. The company has always endeavoured to minimise the amount of litter discarded by its customers which we do in a number of ways. First we place many litter bins inside the restaurants with notices requesting customers to dispose of their rubbish properly and we also ensure that litter bins are located outside each restaurant so that customers may discard their rubbish as they leave.
5. Second, in all our restaurants we ensure that staff, either crew members or lobby hosts/hostesses, always clear rubbish from tables and from the restaurant generally and dispose of it in the many litter bins provided. Thirdly, each restaurant will undertake 'litter patrols'. These are walks undertaken by crew members around the vicinity of the restaurant about every 1/2-1 hour depending on the location and volume of customers of each restaurant. All litter from whatever source is collected and brought back to the restaurant for safe disposal. To my knowledge no other restaurant conducts litter patrols and certainly McDonald's was the first to do so. These patrols have been in operation since the company opened its first restaurant in the United Kingdom in 1974 and is standard practice throughout the McDonald's system. I recall conducting litter patrols myself in the United States in the 1960's when I worked as a crew member.
6. Additionally both on a local and national basin the company spongers and/or works with various groups to promote environmental responsibility in the disposal of litter by the public. For example we work with the Tidy Britain Group in a number of projects, including touring cities informing the public of the proper disposal of waste and in their 'Spring Clean Days' campaign In 1992/93 the company was awarded the Queen's Mother's Birthday Award for Environmental Improvement. We have also been awarded a Certificate of Excellence by the London in Bloom Committee of the Tidy Britain Group for encouraging excellence of floral display in London.
7. Many public litter bins are sponsored by the company in towns and cities around Britain.
8. Although this litter policy is not part of the company's franchising arrangement, no licensee would reject it because, as I have said, it in engrained in the McDonald 's operational practice.
9. At present the company has approximately 528 restaurants in the United Kingdom, 90 of which are franchised to 73 licensees. The target is for a third of our restaurants to be franchised by the end of 1996.
10. The reason for this is that the company recognises that there are a number of benefits in having owner/operators living and working in the community in which they operate, which motivates them to do their work to the best of their ability. This keeps standards high which in turn keeps the company strong. Also the company is able to expand more profitably quicker than by internal growth.
11. A mixture of licensed and company owned restaurants also provides better checks and balances to the system as owner/operators are less likely to tolerate poor quality products or service than company managers, however well trained and motivated.
12. The company is able to monitor the standards of quality, service and cleanliness and value given by licensees in a number of ways. First, all licensed restaurants have a Field Consultant, who is a McDonald's employee, who is responsible for giving advice and support to the licensee, as well as undertaking detailed audits of the store every six months. These consist of performance reviews covering matters such as operations, financial review and profitability. The Field Consultant looks at every aspect of the licensee's business, including their employment practices, standards of health and hygiene, health and safety matters, banking, working conditions, etc. If licensees encounter difficulties or fall short of the company's high standards in any of these areas they will be brought to their attention by the Field Consultant who will offer advice and support in ensuring that such difficulties or shortfalls are overcome.
13. Before Licensees begin operating their own restaurant they will all have gone through a probationary period, the length of which varies according to the experience or circumstances of each person. There is first a rigorous interview process when licensees are interviewed by regional managers/officers of the company from different disciplines to ensure that their motivation, attitude and personality are compatible with that of the company and its operational systems. Once selected, licensees will go through a training process, some will train part time, which can take from between 9-24 months, whereas others train full time and qualify usually within 12 months. Some licensees will already have worked for the company for a number of years either in an operational or administrative capacity so little further training is required.
14. During this extensive training period a licensee works in a company store and each learns and is trained in the company's operating systems, standards and practices. These they then adopt when they run their own restaurants.
15. Because the McDonald's system, practices and philosophies are engrained into licensees the high standards of the company are maintained.
16. As I have said above, all licensed restaurants are subject to regular full field audits and if there is persistent default the franchise can be terminated. Examples include default in quality, service, cleanliness and value, sub-standard operations or default in hygiene standards.
17. In the United Kingdom there has been only one case where a franchise has been terminated since 1974 and this was by mutual agreement. The licensee did not enjoy the system and as such the restaurant was not run to its full potential. Consequently it was mutually agreed that the franchise should be terminated.
18. There are no financial penalties to the franchisee on termination.
19. In my opinion one of the reasons for the success of the McDonald's system is that the company operates their franchises differently from most other organisations. McDonald's charges very little for the license and does not sell any products to the licensee. The licensees buy direct from suppliers who may be different suppliers from those of the company, providing the new suppliers can demonstrate that they meet McDonald's specifications and standards. New suppliers have been introduced to the company's system through the recommendation of licensees.
20. The company makes its profits from royalties paid by the licensees. The company controls the real estate. Thus, if the licensee's restaurant is not profitable, the royalties paid to the company are reduced. This means that the fortunes of the company and of the licensee are married together in ensuring that the restaurant is run as successfully as possible.
21. In the United States where the majority of the company's restaurants are franchised black people and women form a large part of the licensee community.
22. In paragraph 7 on page 3 of the Re-Amended Defence it is stated that on the opening day of the first restaurant in the United Kingdom not one member bought any food despite a large promotional exercise. It is true that on the first day there were a few customers who came into the restaurant which traded for only half a day, from between 2-3 p.m. to the evening.
23. At the time the restaurant management comprised Bob Rhea who was the joint venture partner with Geoffrey Wade and me. I was the Manager and I was also in charge of purchasing.
24. Although the company on the first day only had limited takings (I recall they were in the region of £100) we persevered and the company now has over 500 restaurants with a projected turnover in 1994 of £72Om.
25. Not only is the United Kingdom company successful in terms of size and profit, it is also used as a training ground for many other countries and has provided a buoyant export market for our suppliers.
26. On page 5 paragraph 6 of the Defendants' Re-Amended Defence it is alleged that I admitted in or before December 1985 that 'most of our television commercials went out in the afternoon when the kids were watching. It was pressure from the kids which brought the parents into our restaurants."
27. I have no recollection of making this statement and do not believe that I did so because the contents of it are not correct. The majority of our television commercials do not go out and never have gone out in the afternoon. Such commercials, particularly in 1985 when McDonald's was less well-known to the public, were screened when parents were also watching the television which is known as 'cross over time'. This ensures that parents are able to see and if necessary monitor what their children are watching.
May 24, 1994|
Appeared in court|
exhibits: Not applicable/ available
transcripts of court appearances: