It is only logical to assume that large franchise stores may have negotiated hundreds of leases in the past for successful franchisees and know exactly the location where the franchise should be and how much they should pay to rent the space. It is widely believed that franchise giants, like McDonald’s, use their clout in order to negotiate the best possible lease for their franchisees and pass the savings on to them to help lower their operating costs. After all, the lower the rent the higher the profit margin can be. More profits for the franchisee means higher wages potentially for minimum wage employees. One would never suspect that a franchise would negotiate a lease with the intention of making windfall profit by renting the property back to a franchisee at above market rents, but that is exactly what McDonald’s is doing.

McDonald’s has been accused in the United States and in Europe by franchisees for violating antitrust laws by forcing franchisees to lease properties back from the corporation, charging the franchisee excessively high rents to make a profit. Documents indicate that McDonald’s makes over 10% year after year on their investment properties with this rent scheme. McDonalds’ franchisees are captives and have no choice in the matter and are forced to rent from McDonald’s. Franchise industry watchdog groups have called the McDonald’s practices fraudulent and deceptive and call on the company to make full disclosure of their rental strategy in accordance with state by state franchise laws.

Source: http://www.bluemaumau.org/15885/seiu_asks_state_ags_investigate_how_mcdonald’s_deceives_franchisees_exorbitant_rent