McDonald’s is simplifying franchising policies to attract more diverse candidates

The McDonald’s logo is seen on a restaurant in Arlington, Virginia January 27, 2022.

Joshua Roberts | Reuters

McDonald’s is changing the way it awards franchises in hopes of attracting more diverse candidates.

From 2023, the fast-food giant will rate every potential new operator equally. In the past, preferential treatment was given to current franchisees’ spouses and children.

“We have given much thought to how we can continue to attract and retain the industry’s best owner/operators – individuals who represent the diverse communities we serve, bring a growth mindset and focus on excellence in execution, while maintaining a… cultivating a positive work environment for restaurant teams,” said McDonald’s U.S. President Joe Erlinger in a message to franchisees seen by CNBC.

McDonald’s will also separate the process through which it renews franchisees’ 20-year agreements from evaluating whether the franchisee can operate additional restaurants. Additionally, Erlinger told U.S. franchisees that the company will more clearly integrate its values ‚Äč‚Äčinto its standards for franchisees.

McDonald’s declined to comment on the changes at CNBC.

The company recently came under pressure over a plan to introduce a new appraisal system early next year, angering some franchisees who have concerns about potential worker alienation.

McDonald’s has approximately 13,000 franchise locations across the United States. According to Restaurant Business Online, more than 1,750 locations were sold last year, in part because some operators decided to exit the franchise.

In December, McDonald’s pledged to recruit more franchisees from a variety of backgrounds and committed $250 million over the next five years to help those candidates fund a franchise. It is part of the company’s broader effort to promote diversity at all levels of the company.

Black franchisees, both current and former, have sued the chain in recent years over alleged racial discrimination. One of the lawsuits was dismissed, while another resulted in a $33.5 million settlement from McDonald’s.

A majority of the company’s shareholders voted in favor of an independent civil rights review in late May. The proposal was non-binding, but the company said it had hired a third party to conduct a diversity assessment.