• McDonald’s executives discussed why the fast-food giant is speaking out against racism in an internal webcast this week. 
• “Being silent is not an option. We must lead. We cannot go back to business as usual,” said Joe Erlinger, the head of McDonald’s US business. 
• Franchisees and executives said that speaking out was the right thing to do and that being respected as a socially responsible company will have financial rewards. 
• “We are starting to lose our younger African-American and multicultural consumers,” said Morgan Flatley, McDonald’s US chief marketing officer. “We need to make sure we are looking through the lens of our operators, our crew, and our people to better connect with African-American youth as we go forward.”
• Roughly 1,100 McDonald’s locations had closed for some period amid protests as of Tuesday night, primarily due to curfews. About 52 locations were damaged amid looting, but no employees had been injured. 
• Visit Business Insider’s homepage for more stories.

As fast-food chains put out statements and make donations in response to protests sweeping the US, an internal McDonald’s meeting offers a window into why brands are speaking out against racism now. 

Joe Erlinger, the head of McDonald’s US business, and CEO Chris Kempczinski have spoken in support of protests over the last week, following the death of George Floyd. McDonald’s is donating $1 million to the National Urban League and the National Association for the Advancement of Colored People (NAACP).

The fast-food giant posted a video on social media, listing the names of Black people who had been killed by police or in incidents of racist violence. The video ends with the words: “Black lives matter.”  

—McDonald’s (@McDonalds) June 3, 2020

“There were some who responded to my note who suggested that we should simply stay out of it,” Erlinger said in an internal webcast on Wednesday. “That’s not the type of leader that I am, and that’s not the type of brand that McDonald’s should be … Being silent is not an option. We must lead. We cannot go back to business as usual.” 

While McDonald’s has taken a public stance to support protests, this webcast — a recording of which was viewed by Business Insider — offers insight into the company’s internal decision making and further actions. McDonald’s declined to comment further on the webcast.

“So much of what we see online shows neighborhoods in shambles and streets on lockdown, and you will also see, obviously, a lot of political discussions,” Erlinger said on Wednesday. “But we cannot forget what this is about — it is about the violence, oppression, and the pervasive injustices against African Americans that were delegitimized for far too long.”

‘For too long we’ve remained silent’

McDonald’s. Catherine Ivill/Getty Images

On Tuesday, McDonald’s held an internal global town hall with Kempczinski, Global Chief People Person Heidi Capozzi, and McDonald’s Chief Diversity and Inclusion Officer Wendy Lewis. In the webcast, which was attended by roughly 5,000 people from 26 countries, 14 employees shared personal experiences and answered questions. 

“I think we have really been a role model for so many in terms of the power and the importance of diversity,” Kempczinski said in an excerpt obtained by Business Insider. “But I think I’d also have to state the obvious, which is we have a lot of work to do still.”

Following the global town hall on Tuesday, Kempczinski and Erlinger met with the National Black McDonald’s Operators Association (NBMOA).

NBMOA CEO Larry Tripplett discussed the meeting in Wednesday’s webcast, saying that McDonald’s needs to earn the respect of African-American customers and fix inequities in how Black franchisees are treated. 

In December, Business Insider reported that Black McDonald’s franchisees say their stores net $68,000 less a month, on average, than McDonald’s overall franchisee average, a disparity has more than doubled in recent years. 

Tripplett called for McDonald’s to take aggressive measures to end disparities. He said those seeking to be better allies should aim to build relationships with local institutions such as churches and senior centers, as well as provide resources (such as higher pay or gift cards) for staff. 

“Ultimately, by doing the right thing, the entire brand will be enhanced — and yes, there will be financial rewards, in addition to the rewards we will receive by being a socially responsible company,” Tripplett said. 

Numerous McDonald’s executives and franchisees discussed the importance of speaking out against racism.

Vicki Chancellor, a franchisee who serves as the chair of McDonald’s operators’ national advertising (OPNAD) fund, discussed her own experiences with racism at the company. When discussing McDonald’s decision to release the “Black lives matter” video this week, Chancellor said, “for too long we’ve remained silent.”  

“Not only is it the right thing to do, but today consumers are watching and making decisions based on how brands are acting,” said Morgan Flatley, McDonald’s US chief marketing officer. 

All the victims named in McDonald’s video, which was released on social media, had their inclusion approved by their families, with McDonald’s donating to a charity or nonprofit of the family’s choosing. 

McDonald’s plans to work closely with Wieden & Kennedy New York and Burrell Communications in further marketing, according to Flatley. The company launched its “Black & Positively Golden” campaign last year, focused on African-American customers. 

“We are starting to lose our younger African-American and multicultural consumers,” Flatley said. “We need to make sure we are looking through the lens of our operators, our crew, and our people to better connect with African-American youth as we go forward. Today is the beginning of that journey for us.” 

Vice president of US communications Dave Tovar noted that McDonald’s will not engage in back-and-forth on social media about the video, including criticism from what he called well-paid critics who attempt to “tarnish” McDonald’s brand.  

Critics include Deatric Edie, a McDonald’s worker and leader in the Fight for 15 movement, a Service Employees International Union-backed campaign for fast-food workers’ pay and benefits. Edie released a statement on Wednesday, saying McDonald’s “culture of white supremacy extends from the fryer to the front office.” 

“You cannot be against ‘systemic oppression’ when your policies force hundreds of thousands of Black and Brown workers to live in poverty,” Edie said. “You cannot claim to be against ‘inequity, injustice and racism’ while lobbying against paid sick days during a pandemic, putting profits ahead of workers’ safety, ignoring sexual harassment and fighting efforts of Black and Brown workers to join together in a union.”

McDonald’s workers in at least 20 cities have organized protests during the coronavirus pandemic over issues such as lack of masks and paid sick leave. While company-owned locations offer sick leave, some franchisees do not. Franchised locations make-up roughly 95% of the chain’s approximately 14,000 locations in the US.  The discrepancy between company and franchise policies left roughly 517,000 McDonald’s workers without paid sick leave prior to the pandemic, The New York Times reported, citing surveys from 2018 to 2019 by The Shift Project.

McDonald’s representatives previously told Business Insider that more franchisees debuted new paid sick leave policies during the pandemic, as two weeks of paid sick leave in COVID-19 related cases is now required by law for companies with 50 to 500 employees.

1,100 McDonald’s locations faced temporary closures due to protests and curfews

McDonald’s. Nathan Stirk/Getty Images

During the webcast, executives also discussed the impact of protests, looting, and curfews on operations.

Roughly 1,100 of the more than 14,000 McDonald’s locations in the US had closed for some period due to immediate needs or curfews as of Tuesday night, according to Mason Smoot, McDonald’s US chief restaurant officer.

Smoot noted that the situation was fluid, but roughly 52 locations had suffered some kind of damage and 40 cities had implemented curfews in some form. No employees had been injured. 

Executives also discussed the need for concrete action moving forward.

Erlinger said McDonald’s plans to tap into new groups to recruit diverse franchisees. He said he has tried to surround himself with diverse hires since being promoted late last year, noting that 100% of field operations vice presidents are now people of color, up from 80% when he started as US president. 

Melissa Kersey, McDonald’s chief people officer, said that the company started using scorecards to measures diversity two years ago, comparing itself to competitors including Amazon, Walmart, and Starbucks. According to Kersey, McDonald’s is “equal to or well above” competitors in all measures, though she said the company still has progress to make. 

Erlinger acknowledged that McDonald’s has been “spotty” at times on setting tangible goals related to diversity. 

“I think that’s my commitment as a leader — is I’ve got to set the tone,” Erlinger said. “And obviously, one of the ways we set the tone is through this listening and learning that we’re doing now. But at the same time, I need to set goals and set targets and hold people accountable to them.” 

Source: https://www.businessinsider.com/inside-mcdonalds-response-to-george-floyd-protests-2020-6