McD’s Franchisees See Tighter Credit For Drinks Program

Crain’s Chicago Business:

Wall Street’s credit crisis is trickling down to McDonald’s Corp. franchisees.

McDonald’s executives told franchisees last week that a lending program with Bank of America has reached its limits, and franchisees need to look to other banks for financing, according to a memo obtained by Crain’s.

The tightening credit markets could slow McDonald’s introduction this year of latte and mocha drinks in its 14,000 U.S. restaurants. McDonald’s wants franchisees to spend upwards of $100,000 each to buy the equipment and remodel restaurants to accommodate the new specialty coffee machines.

“Banks are nervous about lending for the (specialty coffee program),” says Dick Adams, a McDonald’s franchisee consultant who has seen a copy of the memo.

Bloomberg News first reported the memo on Monday. A McDonald’s spokesman said in a statement that the company’s “national beverage strategy is on target and progressing as planned.” Bank of America officials couldn’t be reached for comment. Read more.