Day 086 - 09 Feb 95 - Page 78
1 from the company", this is to start up, yes, the
2 franchisee, "which is repaid from the net proceeds of the
3 restaurant. If follows that it is in their financial
4 interest to ensure that standards in the restaurants are
5 kept high". Do you know about the repayments from their
6 proceeds of franchisees? Do you know they have to pay a
7 certain amount per year back to repay the money they have
8 borrowed?
9 A. I think that the sentence, "As such, they obtain the
10 necessary finance from the company" refers specifically to
11 McDonald's employees who have been employed for 10 years
12 before they become franchisees and not to any franchisees
13 that are not in the company. A normal franchisee would
14 have the financial backing when it came in. It is just
15 people that work for the company for 10 years.
16
17 MR. JUSTICE BELL: That is how I had interpreted paragraph 68,
18 that the finance for the company and repayment from net
19 proceeds is a facility available to long-standing employees
20 of McDonald's who have been employed for 10 years or more.
21 A. That is right, yes.
22
23 MR. MORRIS: For those employees then, ex-employees, they would
24 have to repay back the finance that they have been loaned,
25 yes?
26 A. Yes.
27
28 Q. From sales. So how does that guarantee, how does that show
29 "it is in their financial interest to ensure that
30 standards in the restaurant are kept high"?
31 A. Quite simply, by conducting your business efficiently,
32 looking after your customers, looking after your crew,
33 delivering quality service, safe products, your sales will
34 increase, but that the more your sales go up, the more
35 profit you make. So, it is just business sense that by
36 operating a business where you keep your staff turnover
37 down by good labour practices, that you make sure the
38 environment that they work in is safe, that the food that
39 is cooked is food safe, that surrounds are hygienic and
40 that you look after your customers well, you know, your
41 business will blossom, and then you will be able to pay the
42 money back. If you were to do the opposite and cut any
43 corners, then you would not be taking as much money,
44 thereby your profits would not be as high, therefore, you
45 would not be able to pay your loan back.
46
47 Q. But the No. 1 priority is that they must increase their
48 sales?
49 A. I think that the No. 1 priority is to look after the
50 customers and then second to that is your sales
51 increase -----
52
53 Q. You are saying that the increase in sales mirrors, in your
54 opinion, that the customers are being looked after, but the
55 actual requirement, the reality, is that profits have to be
56 there, the increase of sales has to be there, in order to
57 pay back the finance? For whatever reason that sales have
58 gone up and the profits are being made, that is what is
59 important, is it not?
60 A. It is always emphasised to licensees that they have to
