The Recession May Not Be Good for Fast Food Franchises After All

The Wall Street Journal published a smart, counter-intuitive piece today that suggests fast-food giants, in an effort to stay ahead of the recession, are squeezing the hell out of their franchisees, leaving them with little to show for their efforts.

So much for the idea that McDonald’s is making a killing in this bad economy.

The gist of the story is this: Fast-food companies are trying to lure customers back by demanding that franchisees add new, sometimes “gourmet” items, which then require new machines and new overhead costs.  These same franchise operators also got hit with a minimum wage hike in July. There apparently just isn’t that much margin in franchise operations to make those numbers work.

Reports the Journal:

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