McDonald Is Ripping Off its European Consumers

McDonald's is giving a tough time to the European consumers and franchisers

When it is about McDonald’s Corporation, the Americans quickly start thinking about burger, fries and value meal offerings. On the other hand, things are different towards the Atlantic where the company is known for increasing prices and harassing consumers.

A coalition of European Consumer Rights organization recently filed a complaint to the European Commission, where they have demanded an investigation. The authority has been asked to conduct an investigation on the mostly neglected ways by the company through which they abuse their power, and sabotage the right of consumers and franchises all over Europe.

So this might provoke some to ask that how a company that retails fast food items be an imminent threat to the masses. The explanation is quite simple, the company has a reputation f selling foods however, and their business model is not just made up of this. The company has a core business of selling real estate which most of us aren’t aware of.

MCD forces all its franchises to lease the property on which they are operational directly from the company which no other company retailing fast food does. So since franchisers do not have any other option, thus the company y charges them almost 10 times more than the original price which is mere brutality.

So it will not be wrong to say that a substantial chunk of the company’s revenues are governed via rents. It has been estimated that two third of the company’s income is via rent.

Apart from charging high rents, the restaurant is forced to comply with the other hardsh conditions. This includes contracts which are long terms, high royalty fees, “one-to-two year non-compete clauses”, and broad termination clauses.

According to Huffington Post, “What allows McDonald's to get away with this scheme is the fact that it is, by several orders of magnitude, the dominant fast-food company in Europe, with some 8,000 stores across the Continent serving 15.7 million customers. These stores generated $19 billion in sales in 2014, nearly twice the sales of its nearest competitor. In other words, McDonald's is big enough to write its own rules.”

So now it will not be wrong to say that MCD is the evil perpetuator in the food industry of Europe. In one part of the world, the company is offering price cuts to the consumers whereas in the other half, owners and consumers are being sabotaged off their rights. This needs to end here before the European Commission takes any strong step.