Page 44 - Everything I Know About Business I Learned

Everything I Know About Business I Learned at McDonald’s

A One-of-a-Kind Ombudsman Program
In the spirit of wanting to do right by McDonald’s stakehold-
ers, the company in 1974 launched its ombudsman program,
widely believed to be the first of its kind in the industry, where
owner/operators as well as corporate employees could air com-
plaints to an unbiased party. McDonald’s put up the resources
to ensure that decisions were fair, which over the years was not
insignificant, and the ombudsman, interestingly, did not report
officially to anyone—and therefore was not influenced in deci-
sion making by executive management. The ombudsman heard
some cases himself, but in the situations where there was con-
troversy, particularly with issues of impact from new stores
being built, he brought an objective operator from another
region to work with him on this—a very insightful and fair
approach. John Cooke, who served as the first ombudsman, said
that during his tenure he fixed about one-third of the cases, after
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determining that they were not handled properly by the com-
pany. In the United States, the program still exists today, with a
national ombudsman and a total of three franchise relations
ombudsmen—one for each division.
Said former ombudsman Tom Dentice: “The ombudsman sys-
tem was probably one of the greatest things we did from an
integrity standpoint.” While not every owner/operator took
advantage of the program, those who did seemed to appreciate
that the system provided a venue to air grievances. “I think that
is one of the programs that absolutely set the foundation of the
company having integrity among the franchisee community.
Because once the decisions were made, they could appeal to the
company president, for example, here in the United States, and
the president would sit down and listen to them,” Tom added.
“I don’t think the president ever overturned one.” In his tenure
as ombudsman, Tom handled very few cases, largely he said
because most of the decisions were good ones.