Italy watchdog ends investigation into McDonald’s franchising terms

Adds qualifications, detail

MILAN, June 30 (Reuters) – Italy’s antitrust authority claimed on Thursday it experienced closed an investigation released last calendar year over U.S. rapidly-food chain McDonald’s MCD.N franchise phrases in the state.

The AGCM regulator stated that the firm experienced committed to removing clauses in contracts with its Italian affiliate marketers which could raise financial dependence difficulties and “which could unduly condition their perform and reduce, in an unjustified way, their gain margins”.

“The Authority deemed that the commitments proposed had been adequate to take out the opposition fears associated to abuse of economic dependence alleged in the opening proceedings,” it stated in a assertion.

Following complaints by 3 franchise operators, the watchdog said in August 2021 that, a series of pervasive and binding clauses on costs, promotions, shares, materials and purchases, economical administration, amongst other individuals, could be noticed as elements of abusive carry out.

With most of its shops operated by franchisees, franchising is an significant company model for McDonald’s, which reported earnings of $23.2 billion very last year.

AGCM before observed that the U.S. business could have been fined as considerably as 10% of its world turnover experienced it been observed responsible of breaching Italian antitrust regulations.

McDonald’s has 640 restaurants in Italy, which are largely managed beneath a franchising regime by 140 licensees. It employs 27,000 people in the country, the firm’s web page confirmed.

(Reporting by Federico Maccioni, editing by Giulia Segreti and Jason Neely)

((Federico.maccioni@thomsonreuters.com +39 3420768883))

The sights and views expressed herein are the sights and views of the author and do not automatically mirror those of Nasdaq, Inc.