Day 123 - 09 May 95 - Page 54


     
     1        your progress.  At such time, if there is not improvement,
     2        then we will take stronger measures to make sure that that
     3        is done".  I think it is kind of obvious why we do that.
     4        Our reputation is very important, and all it takes is just
     5        one or two, you know, cases where a person is not doing the
     6        proper thing for it to tarnish our overall reputation in
     7        that marketplace.
     8
     9        So, adherence to the basic tenets of business and adherence
    10        to the franchisee agreement we hold very seriously.
    11
    12   MR. MORRIS:  I cannot remember what the question was now.
    13
    14   MR. JUSTICE BELL:  I just wanted to get straight in my mind what
    15        the extent of actual supervision by McDonald's Corporation
    16        was of the way franchisees ran their businesses.
    17
    18   THE WITNESS:  My Lord, I would also add that from discussion
    19        with some of my international partners, I would say that
    20        the practices of some of my compatriots are a little
    21        stronger than in the United States.
    22
    23   MR. MORRIS:  In terms of control over what happens in the
    24        franchised stores?
    25        A.  In terms of what is expected from the franchisee,
    26        right.
    27
    28   Q.   I mean, when McDonald's talks about its stores, it always
    29        talks about all the stores?
    30        A.  That is right.
    31
    32   Q.   15,000, or whatever it is, and when stores do something
    33        praiseworthy McDonald's gets the credit, yes?
    34        A.  Yes.
    35
    36   Q.   Are you happy -----
    37        A.  There is a good reason for that.  I do not know if you
    38        know or not, but the reason why it is important is the
    39        consumer, the customer, generally cannot make a distinction
    40        whether or not it is a Company owned or franchised owned
    41        restaurant.  All he or she sees is the Arches, the Golden
    42        Arches.
    43
    44   Q.   That is right.  But when a franchisee does something --
    45        whatever the opposite of praiseworthy is -- unpraiseworthy,
    46        then does the Company also take responsibility, McDonald's
    47        takes responsibility?
    48        A.  Well, if we do something praiseworthy, whether we like
    49        it or want the praise or not, it comes to us.  If it is
    50        something that a franchisee does in a community that is 
    51        noteworthy and it receives attention, locally and 
    52        nationally, then, you know, that is something that inures 
    53        to the Corporation.  I mean, we all benefit; his fellow
    54        franchisees benefit and the Corporation benefits from that.
    55
    56   Q.   So to make it easy for ourselves in this case, McDonald's,
    57        it has been said, have 15,000 stores.  As far as you are
    58        concerned, it is what those stores do that is relevant to
    59        this case; is that correct?
    60        A.  That is correct.

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