Companies/ Industries hen Steve Easterbrook became chief executive officer of Mc

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Companies/ Industries hen Steve Easterbrook became chief executive officer of McDonald's in March, there was little doubt that he'd face a tough fight with the likes of Burger King, Shake Shack, and even Chipotle Mexican Grill, in which McDonald's once had a big investment. Yet it's becoming clear he has other foes who may be difficult to quell: his own franchisees. The fast-food chain is at odds with some of the estimated 3,000 men and women who operate most of its 14,350 restaurants in the U.S. A recent survey by Mark Kalinowski, an analyst at Janney Capital Markets, found that acri- mony between the restaurant opera- tors and McDonald's corporate leaders is as high as it's been in the 12 years the firm has polled franchise owners. Stung by falling profits, franchisees grouse that McDonald's headquarters is out of touch with the realities of runningres taurants in today's fiercely competitive market. They also accuse the company of ignoring their concerns on every- thing from bloated menus to ever-more- costly kitchen equipment to wages foir counter workers. liu The discord compounds the chal- lenges facing Easterbrook, who has vowed to reverse McDonald's six- quarter U.S. sales slump and transform it into a "modern, progressive" burger chain. Since local franchisees are the ones who actually interact with the cus tomers, analysts say Easterbrook will need to repair relations with opera tors before he tries a new recipe for the chain. "They don't work for him, and he can't order them around" says Richard Adams, a former franchisee who now advises operators. "For him to get anything done, he needs franchi see cooperation." McDonald's didn't respond to requests for comment for this story As part of his turnaround plan, Easterbrook is boosting the share of res taurants operated worldwide by fran- chisees to 90 percent, from today's 81 percent. That will please Wall Street by reducing corporate investment in the restaurants, but whether it will speed sales growth is uncertain. Franchisees inalong slump,McDonald'sneeds franchiseehelp. Goodluck e struggling with slow service times, "People are happywhen sales aregood" an issue created in large part by the expansion of McDonald's menu over the years. That's affected the industrial

Explanation / Answer

McDonalds' faces the following issues as per the case:

External issues - Tough Competition with Burger King, Shake Shack, and Chipotle Mexican Grill

Internal issues -

The major effect of all issues is declining sales for McDonald's. Franchise and Corporate do not seem to be in sync with each other. Due to this collaboration is getting difficult and all of them are not working with each other to make certain sales improve. McDonald's must consider giving its franchise some powers to enable them to take decisions according to their capacity. For example - If the franchise doesn't have money to buy equipment for expanding menu then McDonald must give them time to expand.

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