McDonald's warns franchisees impacted by coronavirus could have to downsize or sell

Company has reportedly set aside $40 million in aid for owners

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

McDonald's franchisees may need to sell their businesses due to coronavirus-induced financial struggles.

McDonald's says it'll take millions of dollars to help struggling U.S. franchisees, urging that some will need to downsize or shutter locations, Bloomberg News reports.

The fast-food chain has set aside $40 million in restaurant aid for owners dealing with the financial impact of COVID-19 lockdowns, documents and internal emails obtained by Bloomberg News said.

CORONAVIRUS TENSIONS MEAN ESSENTIAL WORKERS FACE ANGER ON STREETS

Temporary funding will be available on a case-by-case basis and franchisee owners must work with McDonald's to "find a suitable financial solution," according to Bloomberg.

TickerSecurityLastChangeChange %
MCDMCDONALD'S CORP.187.72+2.88+1.56%

Rent and service fee deferrals could be available to those running restaurants inside malls where closures crippled sales and at airports where delivery isn't an option and sluggish foot traffic forced many to temporarily shutter.

WAFFLE HOUSE SHOOTING TRIGGERED BY CORONAVIRUS MASK DISPUTE

McDonald's U.S. President Joe Erlinger on a call last week suggested to franchisees who need funding beyond what the company is able to provide may have to think about closing or seeking out alternative options, the Bloomberg report notes.

McDonald's franchisees may need to consider selling their locations due to coronavirus-induced financial struggles. 

"Each restaurant must financially stand on its own, irrespective of any relief program or vendor concessions related to the Covid-19 crisis," the assistance plan noted.

McDonald's and the National Owners Association did not immediately return a FOX Business request for comment.

MCDONALD'S REVEALS CORONAVIRUS REOPENING PLAN

In an effort to help franchisees recover, the chain announced earlier this month it's investing around $100 million in additional funding for marketing.

McDonald's workers, meanwhile, have been pushing back against the company's labor protections amid the virus. McDonald's workers have contracted the COVID-19 in 17 states, labor organizers say. Employees working at McDonald's chains in 20 cities went on strike on Wednesday, protesting insufficient personal protective equipment available to them on the job, and demanding the company improve its worker protections during the coronavirus pandemic, USA Today first reported.

A survey in April from the Service Employees International Union reported that 92 percent of McDonald's employees polled said that they had no masks or limited access to them; 46 percent reported gloves were seldom available; and 41 percent said there was not enough hand sanitizer.

The chain told FOX Business Wednesday that PPE is in "ample supply."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

One in five workers in the same survey said they came into work while feeling sick because they couldn't afford to stay home without paid sick leave.

CLICK HERE TO READ MORE ON FOX BUSINESS