Thursday, July 17

Accounting For Brand: McDonald’s


In Nevada, a large McDonald’s franchisee pleaded guilty to supplying illegal workers with false identification and agreed to pay a $1 million fine.

Surprising to some, the franchise, which was raided last year, is located in Reno, Nev., where illegal immigration tends to be less of a hot button issue than it is eight hours south in Las Vegas.

While the owner of the franchise was not charged, the company's current director of operations, Joe Gillespie, and former vice president, Jimmy Moore, could face up to five years in prison and a $250,000 fine. The franchise has since promised it will never allow this to happen again.

In a statement, McDonald's Corp. has already said the case "was an isolated incident and not part of any ongoing investigation into McDonald's USA."

The case does, however, mirror another odd story where the manager of a Minn. McDonald’s allegedly turned down a Hispanic applicant after he revealed he was born in St. Paul, Minn. According to the story, the manager said he only hired Mexicans from Mexico.

While McDonald's Corp. handled the issue appropriately from a crisis communication standpoint, its at arms-length handling of franchise owners seems slightly off center of its longstanding brand protectiveness. After all, it was Ray Kroc who once said "the basis for our entire business is that we are ethical, truthful and dependable."

The trend to allow increasing autonomy to franchises began in 1991.

Digg!

3 comments:

Rich on 7/18/08, 9:33 AM said...

More words:

While Luther Mack, owner of the franchise, was not charged, he is feeling ample brand damage. Six days before his company pleading guilty, he
resigned his position on the board of directors for Boyd Gaming Corp., a casino operator.

If Mack hadn't resigned, the company could have faced gaming regulatory issues.

"With his resignation, we would view this matter as closed relative to Boyd," Gaming Control Board member Mark Clayton said Thursday.

HighJive on 7/20/08, 4:22 PM said...

As far as I know, the Hamburglar and Captain Crook, while often up to no good, were never convicted of any crimes. Additionally, McDonaldland chief of police Big Mac never seems to use his authority to incarcerate felons. Yet in the real world, the humans running the corporation appear unable to stay out of legal trouble. Go figure.

Rich on 7/21/08, 10:40 AM said...

Highjive,

My memory might be a little fuzzy, but I don't think the Hamburglar ever succeeded in stealing anything. As for Big Mac, I was always under the impression he was a crime prevention, as in a police presence.

Ha! Didn't work this time.

Best,
Rich

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