It’s hard to go more than a month without hearing a new story about a major corporation breaking labor law. Labor has been a major issue for companies since the pandemic and these violations have increased tensions and resulted in payouts of millions of dollars. The latest company found in violation is the McDonald’s Corporation. Specifically, several McDonald’s franchisees used child labor beyond the legal bounds. McDonald’s Corporate is not directly involved in the violations, yet it calls into question how much control the company has over their franchisees. This is not the first time that in the past few years there has been a major schism between franchisees and the corporate office. What exactly is going on at the world’s largest fast-food chain?

The recent labor violations involved 62 McDonald’s locations that were operated by three franchisees – Bauer Food LLC, Archways Richwood LLC, and Bell Restaurant Group LLC. The labor department found that 305 children were employed in violation of federal laws in the states of Kentucky, Indiana, Maryland, and Ohio. The most egregious violations involved two 10-year-olds who worked as late as 2 a.m. and one of the children was found to be operating the deep fryer. The children were visiting a parent who was a night manager when they were put to work. McDonald’s has put out a statement condemning the practices and the involved franchisees will be penalized an estimated combined total of more than $212,000.

Labor violations have become more frequent in recent years, specifically child labor. The Labor Department found at least 688 minors employed illegally in hazardous occupations in fiscal year 2022, making it the highest on record since 2011. The pandemic created great strains on the market that have led to temporary and permanent closure of businesses, yet it would be troubling if the difficulty in finding labor was involved with these violations.

For McDonald’s, it appears that they will be cracking down on their franchisees this year. In 2022, corporate revised their franchisee guidelines in an effort to create higher performance standards. The new system would increase the frequency of assessors to each location and put each franchisee on a grading system. This system would be used to determine who receives 20-year franchise agreements and could be used to shutter underperforming locations. It would also be an important step in avoiding future labor violations. The new guidelines were met with backlash from franchisees, and some have already exited the franchise over concerns. McDonald’s has already received criticism regarding how it treated minority franchisees by placing them in locations with low traffic and it comes as no surprise that the company will be taking a more hands on approach going forward.

McDonald’s and their franchisees will need to find a way to reconcile these differences considering the difficulties faced by the restaurant industry. McDonald’s is the largest fast-food chain in the world, and they cannot afford to have their brand be misrepresented. This has led to them being one of the more difficult franchises to enter and earned them a reputation as a strict franchisor. McDonald’s will do damage control and we can expect the scrutiny of franchisees to increase.