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McDonald’s Working to Increase Demographic Representation of Franchisees

Effort aims to help underrepresented applicants become McDonald’s franchisees by removing socio-economic barriers — in part through a $250M commitment to alternative financing — to attract more franchisees who reflect the composition of the communities it serves.

Published 2 years ago | About a 4 minute read

Image: McDonald's

McDonald’s Corporation recently announced it is furthering its global diversity, equity and inclusion (DEI) commitments with a focus on future franchisees around the world. Building on its multi-year DEI planning and actions, the fast-food giant has announced a franchisee-recruitment initiative to increase the number of franchisees from all backgrounds — including historically underrepresented groups — in McDonald’s US and all McDonald’s International Operated Markets.

Worldwide, the effort — tailored for each market — will seek to increase ownership opportunities for new talent, both in terms of the number of individual restaurants owned as well as the number of qualified franchisees overall. McDonald’s will commit $250 million in the US over five years to provide alternatives to traditional financing, to help candidates — who may face socio-economic barriers — join the McDonald’s system.

With this initiative, McDonald’s joins a growing number of companies working to broaden employment, skills training, financial literacy and advancement opportunities available to people of color and other underrepresented segments of the workforce.

“During a period of record performance, we must challenge ourselves — even more — to invest in the future,” said McDonald’s President and CEO Chris Kempczinski. “Today’s announcement to attract franchisees who represent the diverse communities we serve is fundamental to that goal and builds on McDonald’s rich history and pride in reflecting those we serve. With this action, we are taking another step forward in fostering an environment where equitable opportunity is part of the lived experience for all our communities.”

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As McDonald’s continues to attract more franchisees who reflect the composition of the communities it serves, it is clear that upfront costs are a barrier to entry for many entrepreneurs — particularly those from historically underrepresented groups, who historically have limited access to capital.

To address the issue, the company will seek to reduce upfront equity requirements for eligible franchisee candidates and leverage its network of banking partners to increase access to financing solutions that will reduce the barrier to entry for candidates. This program enables McDonald’s to build on its strengths and continue to grow its already diverse franchisee base: As of 2020, individuals from historically underrepresented groups — including those that identify as Asian, Black or Hispanic — accounted for 29.6 percent of all US franchisees. Women also accounted for 28.9 percent of all US franchisees.

“Access to capital continues to be a challenge in closing the wealth gap in the US — particularly for minority entrepreneurs,” said Nicole Elam, President and CEO of the National Bankers Association, which is working with minority-owned and -operated banks to help get capital to diverse entrepreneurs. “Efforts that eliminate barriers to entry for aspiring entrepreneurs are critical in helping to bridge that gap — providing a foundation for a lifetime of opportunity and generational wealth creation. This is more important than ever. As the post-pandemic recovery continues, it is critical to support diverse entrepreneurs and the communities they serve.”

To attract additional qualified candidates, McDonald’s will significantly expand its franchisee recruiting and training efforts for all backgrounds. In the US, McDonald’s also plans to support new franchisees through access to cross-functional resources and mentoring from experienced franchise owners, among other programs.

Similar learning and development programs are available to new franchisees in McDonald’s International Operated Markets — markets such as France, Italy and Spain have built relationships with local business schools to create curriculum covering a range of topics to support new franchisee success as they grow and develop in the market.

This initiative furthers McDonald’s global DEI ambition, building on its actions in 2021 — including setting corporate DEI representation goals at leadership levels and aligning leadership accountability for meeting those aspirational representation goals; launching the company’s Mutual Commitment to Diversity, Equity and Inclusion (MCDEI); inviting its US-based suppliers to join the MCDEI pledge; and setting goals to increase purchases with diverse suppliers and allocation of marketing spend to diverse-owned media, content and production partners.