It is unclear as to how this will affect workers.

Wikimedia Commons

McDonald’s Gives Up Control of its Operations in China: Now What?

In a $2 billion deal, McDonald’s has sold most of its Chinese business to a private financial firm
It is unclear as to how this will affect workers.

Wikimedia Commons

It is unclear as to how this will affect workers.

In a surprise move, McDonald’s has announced that it will be ceasing control of operations in China, selling most of the business for $2.08 billion to Citic, a private Chinese financial firm, according to CNN Money. The move is not meant to downsize McDonald’s, but rather overhaul its international operations. McDonald’s CEO Steve Easterbrook hopes that the new owners will have a better understanding of what will succeed in a Chinese market.

Citic will control 52 percent of the business, American investor Carlyle will take 28 percent and the remaining 20 percent will be kept by McDonald’s. The sale could be trouble for fast-food workers, warns the Service Employees International Union, an advocate for workers in Canada and the US.

"Experience in other markets such as Brazil and Puerto Rico has shown the McDonald's master franchisee model being adopted in Greater China is not in the interests of workers, as it makes it harder for franchisees to provide adequate pay and conditions," the union said in a statement.

While employees could be hurt by a tightening of the grip of McDonald’s Global standards, Easterbrook is hoping that the deal will allow quicker expansion in China, with 1,500 stores planned in China and Hong Kong over the next five years, according to CNN Money.

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With this deal, McDonald’s continues its initiative to diminish the number of stores it actually owns in favor of more franchises and revenue-focused deals like this one.