Board for McD ‘Zees Makes Case Against ‘Huge’ Lawsuit
"The headlines would have been huge," if the NOA representing McDonald's franchisees would have filed a class-action lawsuit, "but what of the collateral damage?" said an NOA newsletter sent yesterday to members.
The National Owners Association, the McDonald’s franchisees who famously formed last fall the first independent group to address what they see as corporate missteps, explained why it has “elected to not pursue legal action” against the brand, according to a missive from its board to members sent yesterday.
“We could have filed a class action lawsuit the likes of which our industry has never seen. The headlines would have been huge. And perhaps sweet vindication would salve our bitter wounds. But what of the collateral damage?” the newsletter said.
“How do we square a brand representing happiness with a brand that lives in a courtroom surrounded by fierce attorneys? No offense to attorneys, but generating happiness is not what they do.
“If you have been injured by the company, you should pursue all means of recourse and we will support you. But as an Association, we elected to not pursue legal action.”
But that doesn’t mean NOA members are happy with the contract, known as BBV2020 or Bigger Bolder Vision 2020, that most signed. Given that NOA directors have so far not responded to FT requests for interviews, the regular membership updates show the clearest glimpse into the discussions the group is having, and the stances its directors are communicating.
“The Decahedron that Fred built (along with us) was predicated on a process,” said the June 23 newsletter, referring to the late Fred Turner, former McDonald’s chair and CEO. “It was a system, just like our restaurants are predicated on systems. With BBV2020, we tried a different approach. We tried to write everything into a contract. To formalize the approach. To reduce the need for the back and forth. To try a one size fits all model.
“Most of us signed this contract (kudos to those few that had the courage to not sign). We can claim that we were misinformed, coerced, relying on our operator leadership, but we signed a contract. And so we are bound by it, as is the company. True, there is plenty that has not materialized as promised. There is plenty to build our case and perhaps we would have won our day in court,” and then the newsletter went on to explain why they didn’t file, as noted above, at least to date.
The amended BBV2020 contract was announced the week of June 17, the note said, and there are improvements in it.“We believe the company has made a good faith effort of correcting the majority of the deficiencies in the BBV2020 contract,” and the note praises franchisee leadership for their “hard work making the best of a bad situation,” the bad situation being relying on a codified contract in the first place.
“We at NOA maintain that contracts trying to govern a system of our size is the root of the problem. We believe the entrepreneurial spirit should be utilized whenever possible and that the field produces the best solutions. This is McDonald’s secret sauce. Contracts like BBV2020 dampen that spirit as do picking winners and losers from ivory towers. We should all take this lesson to heart and not repeat it.”
The next meeting of McDonald’s owners who are NOA members is in Dallas October 7 and 8.