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McDonald's CEO Sticks to His Guns: 'Franchisees Set Their Own Pay Scales'

The fast food giant isn't giving into the National Labor Relations Board's "joint employer" ruling without a fight.

Hannelore Foerster/Getty Images

It doesn't look like McDonald's will be raising employee wages across the board without a long, drawn out fight. In an interview with The New York Times, the fast food giant's CEO Steve Easterbrook acknowledged that increasing the minimum wage at its company-owned stores was a key component of growing and retaining quality staff; however, he would not address whether he thought McDonald's franchisees should also improve pay for workers. "Our franchisees are independent businessmen and businesswomen," he says. "They set their own pay scales, and over time, they've been expert at that."

McDonald's is in an ongoing fight against a National Labor Relations Board ruling that defined the company as a "joint employer" of its franchise workers. If upheld, workers at franchises could be entitled to the same benefits as employees at company owned restaurants including paid sick days and higher wages. The McDonald's corporation could also be held liable for labor violations. Still, Easterbrook championed McDonald's $1 wage increase at company-owned restaurants. "We want to hire and train and retain the best front-line staff we can, and pay is part of that package to attract the best and retain the best," he says of the decision.

Easterbrook also dismissed criticism of the all-day breakfast rollout including reports of chaos in the kitchen and plummeting check averages. "We achieved a 98 percent approval" from operators prior to announcing the change, he says. "I think that speaks volumes to the alignment and the unity that the owner-operators have among themselves and with management." Easterbrook says that he plans to announce more long term strategies for the chain's growth and turnaround in 2016.

Last month, the fast food giant confirmed that sales in the third quarter had increased for the first time since 2013, though consolidated revenues and operating income had decreased in the same period. Meanwhile, McDonald's continues to test new menu items. The company is testing sweet potato fries at certain Create Your Own Taste restaurants in Texas. Fortunately, the company's American outposts haven't yet adopted the grey bun.

Video: Five Reasons McDonald's is On the Brink of Failure

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