Some McDonald's Franchisees seek new U.S. law

Reuters; 21st May 1997

A group of McDonald's Corp restaurant operators on Wednesday threw their support behind the American Franchisee Association's attempts to have the U.S. Congress pass a franchisee rights bill.

"We're turning to the law now," said Gerardo Perez, a McDonald's franchisee in Cameron Park, Calif.

Perez was among about a half-dozen former and current McDonald's franchisees at a news conference here who aired complaints about the Oak Brook, Ill.-based fast-food giant.

The most common problem mentioned by the franchisees is the alleged impact on existing restaurants from new outlets being opened.

Florida franchisee Joe Davis, who operates four units, complained that new McDonald's restaurants are "encroaching" on the sales of existing eateries.

Susan Kezios, president of the Chicago-based franchisee association, said her group was trying for a third year to have legislation enacted that would protect operators' rights in contracts with their franchisors.

Kezios said her group was working with Congressman Gary Ackerman, a New York Democrat, who has introduced a bill into the House of Representatives.

"It's a property rights issue," Kezios said of the franchisee legislation.

McDonald's spokesman Chuck Ebeling said the company and its "mainstream" franchisees continue to oppose franchisee legislation, which he said impedes their freedom to do business.

"Of our franchisees, the mainstream generally take the position that more government regulations are not good for small businesses," Ebeling said. "That's why we continue to work with the franchisees in their efforts to defeat, repeal or modify legislation that will hurt their business and the value of their business."

Ebeling added that there are six independent franchisee associations within McDonald's that meet with the company on a regular basis to discuss operator concerns.

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