McDonald’s announces unexpected closure, sparking major backlash

Owning a concern is already challenging enough, particularly successful an situation of rising costs, shifting user preferences, and accrued competition, each amid an uncertain economy.

For franchise systems, the stakes are adjacent higher. They trust connected autarkic operators to uphold the brand's standards, truthful erstwhile things spell wrong, the repercussions tin beryllium much damaging.

Many fast-food chains follow the franchise exemplary to grow quickly, enabling them to physique marque designation and scope caller markets much efficiently than they could connected their own.

A franchisee is simply a concern proprietor who purchases the rights to unfastened and run a company's branded location, benefiting from its established estimation and lawsuit base.

While this exemplary tin beryllium highly profitable, it comes with important risks. The much franchisees a institution has, the harder it becomes to support accordant quality, and if not decently handled, a azygous mistake tin tarnish a company's estimation forever.

A McDonald's (MCD) franchise astatine 1330 Jackson St., the lone determination successful downtown Oakland, California, volition permanently adjacent connected November 30, affecting astir 40 workers conscionable earlier the wintertime holidays, according to abc7 News.

Employees assertion they were notified of the closure lone days earlier Thanksgiving and told they would not beryllium allowed to transportation to adjacent locations. The abrupt announcement triggered a idiosyncratic onslaught connected November 25, with galore longtime employees expressing daze and frustration.

"These workers were fixed 10 days' announcement that the determination would beryllium closing," Maria Maldonado, an organizer with the California Fast Food Workers Union, told abc7 News. "That is not capable clip to find a caller job. Many of these radical were crying erstwhile they heard the determination was closing and volition present person to conflict this holiday."

Despite the workers' claims, the WARN announcement was filed connected October 30, 2025.

The closure follows a wellness contention astatine the downtown Oakland McDonald's determination successful May 2024, wherever the Alameda County Department of Environmental Health temporarily unopen down the edifice aft unrecorded and dormant rats were recovered connected the premises.

A leaked video obtained by KRON4 News showed rats crawling wrong the restaurant, and employees claimed they had been threatened with termination if they documented the issue.

More edifice closures:

• 61-year-old fast-food concatenation softly closes dozens of restaurants nationwide 

• 37-year-old Italian edifice concatenation softly closes astir locations

• Iconic frozen yogurt concatenation makes comeback after closing 2,650 stores

In response, the workers went connected strike, arsenic captured successful a video posted connected X (formerly Twitter) by the California Fast Food Workers Union.

"It's precise important to maine arsenic a tiny concern proprietor successful Oakland that my employees person a harmless spot to work. When we became alert of the issue, we instantly contacted pest power and continued to enactment with them to code the issue," McDonald's franchise proprietor Joseph Wong explained to KRON 4.

This is not the archetypal clip McDonald's has faced issues with franchisees. In April 2025, the Massachusetts Attorney General's Office filed citations against franchise operators of McDonald's, Dunkin' Donuts, and Subway for violating kid labour laws.

These charges were filed due to the fact that the franchisees, Cafua Management Company, The Brewster Company, and Knight Food Service, Inc., failed to get the indispensable permits to employment minors and scheduled 16- and 17-year-olds beyond the state's nine-hour regular limit.

One McDonald's franchisee received a $63,930 good for allowing minors to enactment during prohibited hours and booking their shifts longer than the maximum allowed astatine 8 Massachusetts locations betwixt May 2021 and May 2024.

Data from the U.S. Bureau of Labor Statistics show that astir 17% of caller restaurants adjacent wrong their archetypal year. Long-term edifice endurance is adjacent much challenging, with astir fractional of restaurants shutting down wrong 5 years and lone 34.6% surviving past the 10-year mark, according to Oysterlink.

In 2024, the U.S. had 33.2 cardinal businesses, with 821,589 being franchised establishments, according to Statista. Veterans ain 1 successful 7 U.S. franchises, astir 14%, contributing $41 cardinal annually to the economy.

However, franchising comes with risks.

"Labor experts accidental that franchised chains person higher rates of violations than corporate-run chains due to the fact that theyare little invested successful preserving a brand’s reputation," wrote Lauren Kaori Gurley and Emmanuel Martinez for The Washington Post.

"They are besides nether unit to support labour costs debased to marque up for steep operating costs, particularly franchise fees."

McDonald's is 1 of the world's largest and astir palmy franchises. In the third 4th of fiscal 2025, planetary comparable income roseate 3.6% twelvemonth implicit year, with U.S. income up 2.4%. This maturation was chiefly driven by gross from franchised restaurants, which accrued 7% to scope $4.2 cardinal successful the quarter.

Still, the nutrient manufacture is simply a tricky business. Food work postulation dropped by 1% successful the 4th ending June 2025, according to Circana.

Restaurant Data reports that 13,265 autarkic establishments and 2,712 chain locations closed successful the archetypal fractional of 2024.

"Consumers are saying, 'We're struggling, oregon we're opening to conflict oregon we're reasoning much cautiously astir what we spend,'" said Harvard Business School Consultant and Lecturer connected Restaurants Michael S. Kaufman. "I don't cognize that the quality to support the ample fleets of accepted casual eating restaurants tin continue."

Despite improvement, McDonald’s remains cautious.

"We proceed to stay cautious astir the wellness of the user successful the U.S. and our apical planetary markets and judge the pressures volition proceed good into 2026," said McDonald's CEO Christopher J. Kempczinski successful an earnings call.

"It's a foundational anticipation of our marque to bring consumers done our doors and support them coming back. And particularly successful today's hard macro environment, it's much important than ever."

Related: McDonald's drops much than a 2025 Christmas Grinch meal

This communicative was primitively published by TheStreet connected Dec 1, 2025, wherever it archetypal appeared successful the Restaurant section. Add TheStreet arsenic a Preferred Source by clicking here.