McDonald's franchisees fear fresh beef push is food safety disaster in the making

Fresh, never-frozen beef patties may be what consumers want, but McDonald's (NYSE: MCD) franchisees are concerned that a major change to the chain's operations could give way to a food safety disaster.

In a recent survey by Nomura, Golden Arches' franchisees noted that swapping to fresh beef would not only impact the speed at which burgers could be served, but opened up the chain to potential foodborne illness outbreaks.

"An uncaring employee doing something that puts the entire system at risk," one franchisee said. "We are the lightning rod. Chipotle (NYSE: CMG) will be a walk in the park if we have an incident."

Another wrote, "If we do not handle the meat perfectly there is the opportunity for bacterial invasion of our product."

Some 27 franchisees, who collectively own around 200 McDonald's restaurants in the United States, noted that their same-store sales had grown 2.4 percent in the second quarter. However, many voiced concerns that implementing unfrozen beef nationwide "would be a huge distraction" from the company's turnaround.

McDonald's operates 14,000 restaurants in the U.S., 90 percent of which are franchised.

Until it implemented its All Day Breakfast promotion last year, the chain struggled to maintain strong foot traffic and same-store sales. Since McDonald's began doling out Egg McMuffins morning, noon and night, the company has seen sales boom; the company's stock is up almost 30 percent year over year.

Some franchisees said that the move to fresh beef, which it is testing in 14 Dallas locations, could help improve customer perception of the chain and lead to other quality improvements.

"Our line continues to slow down with added items and will continue to do so," a franchisee wrote. "However, we are a restaurant and we ought to always serve the best food so [the slow down of the line] may not outweigh the positive [of adding fresher ingredients]."

However, the majority see the swap as "purely a marketing move," noting that the brand's naysayers and focus group participants care more about the swap than loyal customers, but won't be enticed into stores if the change is made.

"The only ones who care are the ones who don't eat at McDonald's," one franchisee said.

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