A recent piece on Inc.com titled “What McDonald’s Should Do Right Now Instead of Investing $250 Million to Attract More Minority Franchisees” argued that to drive a truly inclusive culture, companies must not “limit your focus on nurturing an inclusive environment to just one time,” noting that cultures need to be “nurtured and cared for on an ongoing basis as well.” We couldn’t agree more, which is precisely why this long-term investment in the McDonald’s community is central to our multi-pronged Diversity, Equity and Inclusion (DEI) ambition announced in 2020.
The beating heart of McDonald’s is our franchisees. As Ray Kroc once said, “McDonald’s was founded on a strong core belief: our franchisees should reflect the many diverse and vibrant communities we serve.”
Ninety-three percent of McDonald’s restaurants are owned and operated by franchisees, who work tirelessly to achieve their ambitions as successful small business owners. McDonald’s has a long history of supporting entrepreneurs from all walks of life in pursuing their goals. A meaningful commitment to DEI is one that evolves with time–just as ours has–and we’re as proud of our record as we are dedicated to our path forward.
We proudly stand behind the initiative we announced last month to increase the number of franchisees from all backgrounds, including historically underrepresented groups, in McDonald’s U.S. and all McDonald’s International Operated Markets. As McDonald’s continues to attract more franchisees who reflect the composition of the communities we serve, it is clear that upfront entry costs are a barrier to entry for many entrepreneurs who may have limited access to capital. This barrier is particularly felt by candidates from historically underrepresented groups. To address this in the U.S., we’ve committed $250 million over five years to provide alternatives to traditional financing.
It’s disappointing that the piece on Inc.com last week selectively focused on unfounded allegations included in a lawsuit brought by a small group of former franchisees. McDonald’s has refuted the allegations, and there have been no findings that the company violated any laws. While we will fully defend ourselves against any accusations we believe are without merit, that doesn’t take away from the fact that, like most organizations, we have work to do. For all the changes we’ve made over the years that advanced our progress in strides, we know it still hasn’t been enough, which is why we’ve committed to doing even more.
And to use the author’s analogy, that means making sure our whole house is in order, not just one room. To do that, we don’t just pluck initiatives out of thin air. We never stop listening to–and learning from–our people so that our Brand and culture promote an environment where everyone can succeed.
Recent examples include significantly expanding our recruiting and training efforts for franchisees from all backgrounds and supporting new franchisees through mentoring from experienced franchise owners. This builds on our historical commitment to franchisees past and present to be a strong and invested partner.
And our DEI efforts stem from that crucial focus on constant improvement for the whole business.
For example, since launching our Global DEI Ambition in July 2020, we reimagined what allyship and accountability look like in action. As a result, we’ve committed to a 10% increase in spending with diverse-owned suppliers, bringing total annual spend to $3.5 billion by 2025; we’ve increased marketing spend with diverse-owned media from 4% to 10% and with Black-owned media from 2% to 5% of total national advertising by 2024; we’ve established goals to increase representation of historically underrepresented groups in leadership roles and have linked accountability for achievement of those goals to executive compensation. And all 40,000 restaurants and our corporate offices around the world will be held to new Global Brand Standards starting this year, which are aimed at furthering a culture of physical and psychological safety for employees and customers through the prevention of violence, harassment and discrimination.
These efforts are founded in our core belief that no matter where you are in the world, when you interact with McDonald’s–through the app, in a restaurant, by watching a commercial, working in an office setting or as a crew member–inclusion and equity should be as evident and familiar as the Arches themselves. We are working hard to make this the lived experience of every franchisee, crew member, employee, customer and supplier alike–and we welcome the continued scrutiny as we hold ourselves accountable to the promises we’ve made.