Working for Mcdonald's in Europe: The Unequal Struggle?

By Tony Royle | Go to book overview

3

The corporate paradox

McDonald's and its franchise system

If you come in and challenge the system you won't last very long, because the system is the system, is the system.

(McDonald's UK franchise operator)

The only way that we can positively know that these units are doing what they are supposed to…is to make it so that they can have no alternative whatsoever. You can't give them an inch.

(Ray Kroc in Love, 1995:144).

Franchising may be more appropriate in some industries than in others and it is common in the service sector. The fast-food industry in particular is increasingly associated with the activity of multinationals and franchise operations (Felstead, 1993). Indeed, it is a form of international expansion that could be said to have been 'pioneered' by the McDonald's Corporation (Love, 1995). Chan and Justis (1990) suggest that maintaining uniformity while franchising across different societal cultures is particularly complex and difficult. The first question that comes to mind is why would multinationals use franchise operations as a method of international expansion? It is suggested here that there are four reasons for this. First, franchising provides multinationals with much needed capital for expansion. Second, it allows multinationals to share the costs and risks associated with international expansion. Third, it provides multinationals with the local knowledge of entrepreneurs. Fourth, franchise operations may be more efficient in driving down labour costs. A second question which arises is this: given that franchising internationally is complex and difficult and that franchisees are supposed to be independent operators, how can multinationals maintain the internal consistency and uniformity of their operations across societal frameworks?

The main focus of this chapter is to challenge the belief that McDonald's franchisees are truly independent operators and to argue that franchises are much closer de facto to 'subsidiaries' of the corporation. In legal terms, franchise operations are technically independent operators; they are usually considered to be self-employed and therefore not 'owned' or controlled by

-35-

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Working for Mcdonald's in Europe: The Unequal Struggle?
Table of contents

Table of contents

  • Title Page v
  • Contents vii
  • Figures and Tables viii
  • 1 - Liberalism, Collectivism and the Multinational Corporation 1
  • 2 - Welcome to Big Mac 16
  • 3 - The Corporate Paradox 35
  • 4 - Mcdonald's at Work 56
  • 5 - 'there's No Place like Home' 85
  • 6 - Co-Determination? 119
  • 7 - For a Few Dollars More 150
  • 8 - Where's the Beef? 177
  • 9 - Conclusion 196
  • Appendix 215
  • Notes 223
  • References 226
  • Index 241
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