Sexual assault, harassment, racism and bullying – these are just some of the disturbing claims made by more than 100 current and recent McDonald’s UK in an explosive BBC investigation.
Describing a toxic workplace culture, staff as young as 16 and 17 say they were almost routinely groped and harassed by senior colleagues and managers in the McDonald’s workplace.
Many who spoke to the BBC say they raised complaints but these were often not listened to.
McDonald’s acknowledged it had “fallen short” and it “deeply apologised”.
As well damage to the brand’s reputation, the episode raises questions about its franchise system, which adds a layer of complexity given many of the allegations took place in independent businesses, and the complainants and alleged perpetrators are not directly employed by the company.
So just how damaging is the scandal to the brand’s reputation, will it create a hit to sales, and what can the company do to get back on track?
Reputational damage
Tim Toulmin, an expert in crisis PR and reputation management, and the managing director of Alder UK, described the claims as “shocking” particularly given the ages of those involved.
The fact McDonald’s has been called out on this already in February suggests the company hasn’t been as proactive in changing its culture as they as it could have been, he says.
“It’s a really stark reminder that even in 2023, after many years of these sorts of scandals happening, big companies are still struggling to get a grip on these issues,” he tells MCA.
In mitigation, McDonald’s is a complex business, in part due its massive size, but also due to its franchise model, meaning management has a degree of separation from what’s going on the ground.
Still, that shouldn’t be an excuse for the company to evade its responsibilities, Toulmin says.
“The fact is they entrust their brand to these handpicked local franchisees, they can’t really hide behind the excuse that they are a franchise model.”
“It just makes it more difficult in terms of in terms of trying to foster a unified culture.”
Having acknowledged and apologised for the failures under its roofs, the company must take decisive action to improve its structures and systems.
Step one would be to improve the complaints processes and whistleblowing mechanisms to ensure victims are heard, Toulmin says. “It might be complainants don’t feel that they will be heard. That’s something they should look at.”
The company needs to ensure it is auditing its own culture regularly and doing surveys specifically aimed at uncovering this type of behaviour. “They’ve obviously got a challenge here, and they need to be able to demonstrate that they are changing.”
They may also need to bring in some outside expertise as to how to improve the culture and franchise business models, as well as make some public pledges around accountability.
“It’s one thing to investigate the specific complaints, but how are they going to build confidence within their workforce, and among people who might want to come in and work for the company? They need to make some sort of tangible pledges that they will then report back on without having to wait for the BBC to do another exposé on them.”
That said, Toulmin doubts whether the allegations will necessarily translate to a loss of sales. “Consumers generally have a very high tolerance threshold for these sorts of things. Individuals make choices based on what’s convenient for them and what’s cheap. They don’t tend to think about whether someone had a bad experience in that workplace, all the evidence is that just doesn’t happen.”
Regardless, there are plenty of other reasons to make improvements – such as reputation, political scrutiny, regulatory interest, and a large workforce that could continue speaking to the media. “There are loads of good reasons why they should take it seriously - not least on a basic level, where there are people working for them having horrible experiences,” Toulmin adds.
Legal liability
When it comes to the law, could there be any potential jeopardy for McDonald’s, and just how liable is it for workers’ wellbeing within these franchised businesses?
Rustom Tata, chairman and head of employment at law firm DMH Stallard, tells MCA it would be “a stretch” to pin legal liabilities on the brand owner.
The question is whether McDonald’s exercises enough control over franchisees to be held accountable.
“Some reports may give the sense [the claimants] are McDonald’s employees – but they’re not,” he says. “The franchise partners are a number of smaller businesses under the McDonald’s umbrella.
“In the context of liability, franchisees may do their best to run outlets well, but there’s always a risk that could taint or tarnish the McDonald’s brand.
“Despite it being a huge workplace scandal, the risk of damage at corporate level is not major in the grand scheme of things.”
The potential that consumers could boycott the brand is unlikely to significantly impact trade, Tata suggests. While some may make decisions based on ethics, many others will carry on with their spending habits.
He also underscores that similar situations may be just as likely to occur in non-franchised models. “There are lots of situations with direct employment where people are treated badly. People are the most variable and uncontrollable thing in any business.
“In a model having lots of small outlets remote from the centre, anything the centre wants to do gets watered down and may or may not be effectively implemented.”
While treatment of junior staff is difficult to control from the centre, there is more McDonald’s can do in terms in rolling out a set framework of standards – with effective training to encourage its implementation. “It will take time, effort, energy, and cost, but it can be done,” he adds.
People & culture
Allegations of a toxic working culture can have a clear impact on recruitment in a difficult labour market.
Krishnan Doyle, managing director for hospitality recruitment agency Corecruitment, tells MCA the scandal “seems to run deep in the business” – raising questions about its reputation as a stepping stone to a career in hospitality.
“McDonald’s has been seen for a long time as the place where lots of people get their first jobs and where a lot of hospitality professionals had a good grounding to build their careers,” he says. “Undoubtedly that reputation as a while will now be tarnished – despite it seeming to be the behaviour of a few rogue franchisees.”
Doyle believes the matter could well impact the business from a consumer perspective. “Just look at Twitter. Customers care about a brand ethics, now more than ever, and if a brand has acted in this way, then it’s only right that customers hit them in the bottom line.”
The reputational damage is particularly damaging, Doyle says, because McDonald’s is still recovering from a boardroom scandal involving former CEO Steve Easterbrook, who allegedly covered up three relationships with junior colleagues, contrary to company rules, and presided over a sexually charged, alcohol-fuelled culture of late-night partying.
Doyle echoes other comments in saying an internal investigation, followed by an established framework, needs to be implemented.
“As a business in crisis they need to turn over the business and shake it hard. Every single element needs to be forensically investigated and they need to do it quickly.
“An independent investigation has already begun. Any individual members or franchisee businesses need to be suspended until the results of that investigation are published.
“The brand also needs to close down any franchisee business that is not following the law. It’s a hit for the business, but it is essential and most importantly, the right thing to do.
“As a brand, they will have to now have to start the very long journey of building back consumers’ trust – a process that cannot be condensed.”
Systems & training
So just how can McDonald’s get back on track with its franchise system, and what action can it take where there are clear example abusive behaviour from franchise managers?
Kelly Firman, franchise consultant at Seeds Consulting, explains there’s a danger when brand owners don’t have enough oversight of their franchises business.
“Some brands can think, ‘it’s a franchise business, it’s down to the franchisees, they run their business, we just provide the operational support.’
“But the really good brands take a 360 view about all the different solutions to support franchisees,” Firman says.
Communication and training is therefore key, with the responsibility on the franchisor to ensure robust standards are upheld through training. “When you take onboard a new franchisee, the training is so important. You are instilling a culture, the type of brand you are, what you want it to be going forward, and providing people with tools to ensure that they are hiring the right people,” she says.
Equally important is the follow-up to ensure these standards have been embedded into the culture of the business. “You have to stay pretty close. Even though it’s not their business, a franchisor should probably still monitor the types of people they are hiring to work for their brand.
“They can use tools like people surveys, engagement surveys, and get feedback from the wider business on a regular basis. Even with McDonald’s which is absolutely huge, they can still do those kinds of things.”
The all-important next steps for McDonald’s will be how they recover and learn from the scandal.
A close review of the businesses within the system will probably be necessary, and the company could take the decision to terminate contracts – as one MP has already suggested.
“This is a good opportunity for the brand to look at those franchise businesses individually and look at the feedback that they’ve had from those staff,” Firman adds. “For the sake of their brand, if these franchisees are not instilling really high standards for their staff, [terminating the contracts] is definitely something that they should consider.”
McDonald’s response
In a statement responding to the BBC News investigation, McDonald’s UK and Ireland chief executive Alistair Macrow acknowledged failings and promised to investigate and punish alleged perpetrators.
“Every one of the 177,000 employees in McDonald’s UK deserves to work in a safe, respectful and inclusive workplace. There are clearly instances where we have fallen short and for that we deeply apologise,” he said.
“There is simply no place for harassment, abuse, or discrimination of any kind at McDonald’s – and we will investigate all allegations brought to us, and all proven breaches of our code of conduct will be met with the most severe measures we can legally impose, up to and including dismissal.
“In February this year McDonald’s UK committed with the Equalities and Human Rights Commission to a zero-tolerance approach to any kind of harassment. This is supported by a companywide programme of training, the roll out of new policies and strict reporting processes, all aimed at offering the highest possible level of workplace protection for all our employees.
“Already over 2,000 of our managers have completed full awareness training and nearly all of our restaurant teams are now working within these new protections aimed at creating a safe and respectful workplace.
“All of this is backed by McDonald’s Global Standards, a set of stringent and non-negotiable guardrails to ensure safe and respectful workplaces, which we expect of all colleagues and Franchisees across the world.”
