Owning a business is challenging, especially with rising costs and competition. Franchise systems are at higher stakes, relying on operators to uphold brand standards. Fast-food chains use the franchise model to expand quickly and reach new markets efficiently through independent operators who purchase the rights to operate a branded location.

A McDonald’s franchise in downtown Oakland, California, will close permanently on November 30, affecting 40 workers just before the holidays. Employees claim they were given short notice, triggering a strike. Despite claims, a WARN notice was filed on October 30, 2025.

The closure follows a health controversy in May 2024, with live and dead rats found at the location. Workers went on strike, leading to leaked videos showing rats in the restaurant. McDonald’s franchise owner worked with pest control to address the issue and ensure a safe environment for employees.

McDonald’s faced issues with franchisees violating child labor laws in April 2025, leading to citations and fines. Data shows that about 17% of new restaurants close within their first year, highlighting the challenges in the food industry for both independent and chain restaurants.

McDonald’s, a successful franchise, remains cautious about consumer health and market pressures. Despite global sales growth, the food industry faces challenges, with a decline in food service traffic. Maintaining traditional casual dining fleets may be difficult in the current environment.

Read more at Yahoo Finance: McDonald’s announces unexpected closure, sparking major backlash