Day 123 - 09 May 95 - Page 52
1 that we have adopted.
2
3 Q. If you found there were violations of the law going on,
4 what would you do -- not you personally but what would the
5 Company do?
6 A. I understand. It depends upon the nature of those
7 violations, and the seriousness of the violation and
8 whether or not it was the first occurrence. If it were a
9 serious violation of law, or of the lease and licence
10 agreement with the Company, we might move to have the
11 licence revoked.
12
13 If the matter was less severe, then we would sit down and
14 in either case we would sit down with the franchisees and
15 try to address the violation, to implement or institute
16 whatever procedures, practices, that were appropriate so
17 that there would not be -- so they would not be in
18 violation and that that would not occur again. That would
19 be first. But if there were a serious, serious, violation
20 of law, then we probably would move to revoke the licence
21 or ask the franchisee to sell his business and do something
22 else.
23
24 MR. JUSTICE BELL: What is the system of supervision of
25 franchisees' restaurants in the States? The vast majority
26 of McDonald's restaurants are run by franchisees. At what
27 level does someone actually employed by McDonald's carry
28 out a supervisory role, if at all?
29 A. It is not a direct relationship and, looking at an
30 organisational chart, you know, you have a solid line
31 relationship. For instance, people that would be employed
32 by me would have a solid line relationship, but my
33 relationship with franchisees would be more of an advisory
34 one, a dotted line relationship.
35
36 So, if you were looking at an organisational chart and
37 looked at the service that McDonald's Field Consultant or
38 Bob Beavers or someone else in the Corporation would
39 provide to the franchisee, it would be a dotted line
40 relationship. We could not tell them specifically what to
41 do unless it pertained to the set provisions within the
42 licence and lease agreement. The individual -----
43
44 Q. Regardless of whether it is advisory or one can give direct
45 orders which the franchisee has to obey, is there a system
46 whereby the operation of franchisees' restaurants is
47 actually supervised by McDonald's personnel in America?
48 A. Yes, and the system is pretty similar here in England,
49 as I understand. We are set up with close to 40 regional
50 or market offices around the country. Each office is
51 manned by a coterie of field consultants who, on a regular
52 basis, consult with our franchisees and their employees.
53
54 Q. But that involves going into the restaurants?
55 A. That involves going into the restaurants.
56
57 Q. Does it involve looking at the restaurants' paper work?
58 A. Yes, it does. Now, in addition to the visitation by
59 the Field Consultant (and that is really the first line of
60 consultation that we have with our franchisees), his boss
