McDonald's accused of overcharging and deceiving franchisees

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New York - McDonald’s should be investigated for gouging franchisees on rents and deceiving them about how the amounts are calculated, a labour union said in letters to two state attorneys general.

US franchisees paid the world’s biggest fast-food chain more than $3bn in rents last year, a rate of return on McDonald’s real-estate investments that’s as much as triple the industry average, the Service Employees International Union said on Tuesday in a statement. The high cost allegedly makes it harder for franchisees to pay living wages.

The "windfall" rents are calculated in a secretive process that violates state laws in California and Illinois, said the union, known as SEIU.

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