Small Business

Is McDonald's 'broken'? Franchisees are furious

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Even McDonald's franchisees are not "lovin'" it, according to a new survey from Janney Capital Markets (Tweet This).

Franchise respondents rated the chain's six-month outlook for its domestic business more negatively than at any time in Janney's 11-year survey history. The group, which represents about 215 U.S. locations, also reported an extremely strained relationship with corporate; that metric also hit new lows.

"McDonald's system is broken," one wrote. "They talk menu reduction to help our people, simplify our menu for customers—but add products to help sales and it does not work. We will continue to fall and fail."

The dismal outlook comes as McDonald's struggles to turn its U.S. business around amid stiff competition from chains like privately held Chick-fil-A and Chipotle Mexican Grill.

Read MoreMcDonald's vs. TacoBell: Fast food wars turning ugly

Responses were especially scathing surrounding the chain's new Create Your Taste platform, a bet that customers will pay more for customizable sandwiches at McDonald's like they've also done at better burger chains like Shake Shack.

Franchisees complained the chain's new initiative would be pricey for franchise operators to implement.

"Simply can't afford what Oak Brook wants to do, not going to happen," wrote one.

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Many also felt the company's recent U.S. turnaround summit lacked a clear game plan for the struggling chain.

One wrote the summit was a "farce," saying "The ideas presented—such as Create Your Taste—DO NOT fit our business model. McDonald's Corporation has panicked and jumped the shark. The problem is an unwieldy menu (too big) and trying to be all things to all people."

Several also complained about McDonald's decision to raise wages in its corporate locations, a move that one franchisee wrote "left the operators felling betrayed and less of a partner."

More optimistically, a few reported weather had been better lately, and that could mean more customers.

Following the report, McDonald's said it valued the feedback from its franchisees and has a "solid working relationship with them."

"Approximately 3,100 franchisees own and operate McDonald's restaurants across the U.S." wrote spokeswoman Terri Hickey in a statement. "Less than 1% of them were surveyed for this report. We value the feedback from our franchisees and have a solid working relationship with them."

More than 80 percent of McDonald's restaurants worldwide are franchised.

Next week, McDonald's will report its latest quarterly report and first with new CEO Steve Easterbrook at the helm for part of it.

While the new CEO's arrival precipitated a rise in the restaurant's stock, Wall Street doesn't think the bloodletting is done. Analysts estimate U.S. same-store sales dropped 2 percent in the first quarter, according to FactSet.