McDonald’s franchisees dump on delivery

Delivery is a high priority for McDonald’s CEO Steve Easterbrook, and a big worry for franchisees.

Easterbrook expects a rapidly expanding delivery partnership with UberEats to drive sales growth. Franchisees grumble that delivery costs put more pressure on their tight profit margins.

“Our margins do not allow for the commissions that Uber is taking nor the added rent and service fees McDonald’s is enjoying,” a newly formed organization representing most U.S. franchisees told members last month in an email obtained by Crain’s. “Delivery is a growing segment of our business and it will one day cannibalize our on premise restaurant sales. If we allow this to occur under the current arrangement, our net cashflow will go down.”

..Right now, UberEats takes a 20 percent cut of every order, according to three franchisees who requested anonymity.

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